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preparing for the future - Office of the Tasmanian ... › Documents... · • Delivery of $26.4...
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preparing for the future A N N U A L R E P O R T 2 0 1 1 - 2 0 1 2
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Tasmanian Water and Sewerage Corporation (North-Western Region) Pty Limited
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04 About Cradle Mountain Water
04 Our Vision and Mission
05 2011- 12 at a Glance
05 2011-12 Highlights
06 Chairman’s Report
08 Chief Executive Officer’s Report
16 Corporate Governance
20 Directors’ Report
27 Financial Report
StatementofComprehensiveIncome
StatementofFinancialPosition
StatementofCashFlows
StatementofChangesinEquity
NotestotheFinancialStatements
A N N U A L R E P O R T 2 0 1 1 - 2 0 1 2
Contents
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preparingforthefuture
Owner CouncilsBurnieCityCouncil
CentralCoastCouncil
CircularHeadCouncil
DevonportCityCouncil
KentishCouncil
KingIslandCouncil
LatrobeCouncil
Waratah-WynyardCouncil
WestCoastCouncil
About Cradle Mountain Water
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Owners’ RepresentativesUndertheWaterandSewerageCorporationsAct2008(WSCA),theninecouncilownersofCradleMountainWaterarerequiredtoappointthreeOwners’Representatives.TheirroleistoprovidealiaisonpointbetweentheBoardandtheCorporation’sOwners.
The Owners’ Representatives are:
Ald.StevenKons
MayorofBurnieCityCouncil
ChairoftheOwnersRepresentatives
Cr.JanBonde
MayorofCentralCoastCouncil
Cr.JohnPerkins
LatrobeCouncil
Directors
ThecurrentDirectorsofCradleMountainWaterare:
MrMilesHampton,Chairman
MrGrantAtkins
MrBrianBayley
MsSarahMerridew
DrDanNorton
Cradle Mountain Water has the responsibility for managing the delivery of high quality water and sewerage services to homes and businesses across North West Tasmania. We are owned by the nine councils of North West Tasmania.
Vision
Cradle Mountain Water will protect public health, improve the environment, provide exceptional quality services and deliver successful economic and social outcomes for our customers, now and in the future.
Mission
To supply our customers with quality water and wastewater services that meet their expectations and regulatory requirements, and delivers our shareholders sustainable returns on their investment.
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A N N U A L R E P O R T 2 0 1 1 - 2 0 1 2
2011 – 12 Highlights
•Preparation,negotiationandfinalisationofthe2012–2015PriceandServicePlan.
•ReductioninCradleMountainWater’sLostTimeInjuryFrequencyRate(LTIFR)from16.2to12.3.
•Deliveryof$26.4millioninCapitalWorks.
•Implementationofquarterlycustomerbilling.
•CompletedconstructionofWaratahWaterTreatmentPlant.
•InstallationofemergencyassetreplacementsatLeeStreetSmithtonandtheSimplotsewerrisingmaininUlverstone.
•Completedtheinstallationof12,300watermeterstoresidentialandbusinessproperties.
•CommencedtheSupervisoryControlandDataAcquisition(SCADA)projectwhichwillresultinoperationalefficienciesacrossourplants.
•Reductioninpumpstationoverflowsfrom84eventsforthepreviousyearto48eventsin2011-12.
•FinalisationoftheDamManagementPlan.
•NewoperatinglicencesforTullahandSheffieldSewageTreatmentPlants.
A N N U A L R E P O R T 2 0 1 1 - 2 0 1 2
About Cradle Mountain Water
2011 – 12 at a glance
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Scope of Business
Numberofsewagetreatmentplants 27
Numberofwatertreatmentplants 17
Numberofwaterpumpingstations 61
Lengthofwatermains(km) 1,389
Numberofwaterdistributionstoragefacilities 86
Numberofsewagepumpingstations 250
Lengthofseweragemainsandchannels(km) 1,197
Totalsourcedwater(ML) 17,223
Populationreceivingwatersupplyservices# 105,559
Populationreceivingsewerageservices# 98,616
Totalconnectedproperties–watersupply* 43,983
Totalconnectedproperties-sewerage* 41,090
*Totalconnectedpropertiesdoesnotincludepropertiesthatarechargedbutnotconnected.
#Basedonthenumberofconnectedpropertiesmultipliedby2.4(averagehouseholdsizeforMersey/LyellandKingIslandABSDistricts,2006Censusdata).
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preparingforthefuture
The Year under Review
Ineachofourfirsttwoyearsofoperation,CradleMountainWaterconfrontedsignificantchallengesaswesoughttobecomefullyfunctionalasanewlyestablished,standalonebusiness.
Intheyearunderreviewwecontinuedtofaceanumberofsignificantchallenges.Thedemandsonourpeoplehavebeenextraordinarybutthroughtheirefforts,2011-12hasbeenanotheryearofsignificantprogress.
In2011-12wehadbeforeustwoverysignificantnon-negotiabledeadlines:thelegislatedintroductionoftwo-partpricingby1July2012,whichinvolvedtheinstallationofmorethan12,300watermetersacrossNorthWesternTasmania,andthepreparationandfinalisationofourPriceandServicePlanforthethreeyearscommencing1July2012.
Themeterinstallationprogramwasdeliveredwithinbudget,acredittoallinvolvedintheplanningandmanagementoftheverydemandingworkschedule.
ThepreparationofthePriceandServicePlan,itssubsequentreviewandultimateapprovalbytheTasmanianEconomicRegulatorwasasignificantwholeofbusinesstask.
ThattheOfficeoftheTasmanianEconomicRegulatorlargelyendorsedthePriceandServicePlanpreparedbyCradleMountainWaterreflectstheeffortandthoughtthatunderpinnedourPlan.
TheapprovalofthePriceandServicePlanmeansthatfrom1July2012ourcustomerswillmovetoafairerandmoreequitablepricingregimeforwaterandsewerageservices.Overtime,customerswithlikeserviceswillpaylikecharges,irrespectiveofwheretheyliveintheNorthWestregion.
Thefactthatwemetthedeadlines,whilemaintainingourfocusonimprovingwaterandsewerageservicestocustomers,achievinggreaterbusinessefficiency,improvingsafetyperformanceandbuildingamorecohesiveworkforce,isasignificantachievementfortheCorporationasawhole.
Duringtheyear,constructionofthenewWaratahWaterTreatmentPlantwascompletedandofficiallyopenedinAugust,2012.ThenewplantisprovidingtheWaratahcommunitywithfullytreatedwater.WealsocommencedthereplacementofamajorsewermaininSmithton.
Theimplementationofournewbillingsystemhasledtosignificantprogressinimprovingthetimelinessandaccuracyofbillingservicesandhasenabledustocommencedebtormanagementprocessesthathadbeenputonholdwhileweoperatedwithinterimbillingsystems.
Towards a Single CorporationInSeptember2011,onbehalfoftheBoardsofthefourCorporations,IproposedtoourownercouncilsthatSouthernWater,BenLomondWater,CradleMountainWaterandcommonservicesprovider,Onstream,bemergedtoformasinglestate-widewaterandsewerageCorporation.
Chairman’s Report
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A N N U A L R E P O R T 2 0 1 1 - 2 0 1 2A N N U A L R E P O R T 2 0 1 1 - 2 0 1 2
TheBoardofCradleMountainWaterhadreachedtheviewthatamergerofthefourCorporationswouldbeinthebestinterestsofourcustomers,ouremployeesandourowners.
ItisourbeliefthattheTasmaniancommunitywillbebetterservedbyasingleCorporation:thatsuchamovewouldmakeiteasiertoensureaconsistentstate-wideapproach,whichisnecessarytofacilitateinvestmentanddevelopment,andachievesignificantfinancialsavings.
InearlySeptember2011,theOnstreamBoardtookthefirststeptowardsrationalisationwhenitdecidedtoco-locateOnstreamstaffmembersstate-widewithSouthernWater,BenLomondWaterandCradleMountainWaterrespectively.Theco-locationhasincreasedthesynergybetweensharedservicesandtheregionalCorporations,enhancedcustomerserviceandwillenablefinancialsavingsofsome$2.3millionperyear.
Chairman’s Report
InJune2012,ourcouncilownersreaffirmedtheirin-principlesupportfortheamalgamationofthefourCorporationsandagreedtheirpreferredgovernancearrangementsforasingleCorporation.
TheDirectorsofCradleMountainWaterlookforwardtocontributingtotheprocessoftransition,confidentthattheCorporationisnowsufficientlywellestablishedtoeffectivelymanagethechallengesthatwillhavetobeaddressedaswemovethroughthemergerprocess.
Itisourhopethatthedecisiontotakeaproactiveapproachwillensurethatstructuralchangestoourindustrycanbeachievedquickly,efficientlyandwithoutimpactingservicedeliverytoourcustomers.
TheBoardisveryawareofthepotentialimpactofthesechangesonemployeesoftheCorporation.
Whileuncertaintyisinevitableatsuchatime,therealityisthatforthevastmajorityofemployeesnothingwillchange.Theywillcontinuetheirvitalworkinmaintaining,upgradingandbuildingwaterandsewerageinfrastructure,deliveringessentialservicestocustomers,improvingthequalityofdrinkingwater,protectingtheenvironmentandfacilitatingthedevelopmentsthatbringrealeconomicbenefitstothestateasawhole.
TheBoardisconfidentthattheleadershipteamatCradleMountainWaterwillsupportandencourageemployeesthroughthisperiodoftransition.
IcommendthecommitmentandprofessionalismofourCEO,AndrewKneebone,andhisexecutiveteam,thehardworkandperseveranceofouremployeesandthediligenceandsupportofmyfellowDirectors.
Miles HamptonChairman
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preparingforthefuture
Financial ResultsThenetprofitaftertaxfor2011–12was$0.462million.Theresultwasimpactedby
•lowerthananticipatedrevenuefromdevelopers,
andhighercostsassociatedwith;
•de-sludgingofSewageTreatmentPlantstodischargequalitycompliance,
•higheremployeerelatedcosts;and
•doubtfulandbaddebts.
Somesignificantoneoffitemsimpactedtheprofitresultincludingthewritebackofanearlycontractterminationfeethathadbeenpreviouslybookedtorevenue.
OperationsDuring2011-12wefocussedontheidentificationandimplementationofoperationalefficienciesacrossallaspectsofourbusiness.
Wealsomaintainedoureffortstoestablisha“noharm”workplaceculture.
Theintroductionoftechnologytocaptureperformancedatainthefieldhasenabledustoimproveoperationalefficiencyandcustomerservicethrough:
•FieldservicestaffbeingabletomakerealtimeadjustmentstothelocationofassetsinourGeographicInformationSystem.
•Improvedaccuracyofourinformationwhichresultsinbettercustomerservicereporting.
•Trackingthecostsofrepairsinordertoachievegreaterefficiencies.
ThehighlightfortheyearintheareaofwaterqualitywastheinstallationofanewwatertreatmentplantatWaratah.Thisinnovative“modularstyle”membranefiltrationwatertreatmentplantincludesfluoridationandchlorinationthatcomplieswithindustrybestpractice.Themainspowerissupplementedbysolarpower.
SeveralothersignificantwaterprojectscontinuetomakegoodprogressovertheperiodincludingthePaloonaPipelinewhichwillprovidefullytreatedwatertotheKelseyTiersregion.AlsotheprovisionoffiltrationtoimprovethequalityoftheMountainCreeksupplytoRosebery,andtheimplementationofcriticalcontrolinstrumentationforthecontrolofchlorineandfluoridecomplianceatanumberoftreatmentplants.
WhiletheQueenstownwatertreatmentplantwasofficiallyopenedlastyear,qualityissueshavenotyetbeenrectified.Itisanticipatedthattheoutstandingissueswillberesolvedearlyinthenewfinancialyear.
TheplansforimprovedwaterqualityforKingIslandcontinuetoprogressfollowingacommunityforumthatwasheldtoaddressconcernsregardingtheproject.
Chief Executive Officer’s Report
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A N N U A L R E P O R T 2 0 1 1 - 2 0 1 2A N N U A L R E P O R T 2 0 1 1 - 2 0 1 2
Chief Executive Officer’s Report
OngoingimprovementstoourwatertreatmentplantswillassistusinmeetingallobligationsintheAustralianDrinkingWaterQualityGuidelines.Ofmostimportanceisbacteriologicalcomplianceandin2011-12ourwatertreatmentplantscontinuedtoachieve100%compliancewiththisparameter(referGraph1).
Therehasbeenasignificantnumberofincrementalprocessandminorinfrastructureimprovementstooursewerageassetsovertheperiod.Consequently,animprovementineffluentproductionthatcomplieswithourdischargelicenceshasbeenachieved.Averagecomplianceoverallacrossalloftheplantsfor2011-12was44.75%(referGraph2).
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Notetograph:Shouldonelicenceparameterbebreachedtheentireplantisdeemedtobe
non-compliant,asdefinedbytheNationalPerformanceFramework.
Water Quality Compliance
EPA Compliance 2011-2012
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%systems98%freeofE.coli
%compliance
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preparingforthefuture
The key objectives for the 2012-13 financial year will include:
•ImplementationofaCustomerServiceStrategytoincreaseservicelevelsacrossthebusiness.
•Improveddatavalidationtominimisebillingissuesarisingfromdatainaccuracies.
•Improveaccessibilityofservicesforcustomersviaonlineselfservice.
Key Facts for the 2011-12 Financial Year
NumberofCustomers* 45,204
Totalcallsto13MYWATER 39,736
Averagecallwaitingtime 2minutes28seconds
Servicelevels(%callsansweredwithin30seconds)
41.9%
*NumberofcustomersthatarechargedbyCradleMountainWaterwhohaveaconnectionpoint.
CommunicationsThefinalisationofthePriceandServicePlanresultedinareviewandsignificantupdatingofourwebsite.
Thisoccurredinparallelwithacommunicationcampaigntoincreaseawarenessofpricingchangesthatcommencedon1July2012.
Therewasanincreasedemphasisonimprovingcommunicationwiththemediainresponsetocustomercomplaints.Aproactiveandtransparentapproachwasadopted,deliveringbetteroutcomesforallpartiesinvolved.
AcommunicationinitiativethathasprovenextremelybeneficialisourFacebookpage.Verypositivecustomerrelationshipoutcomeshavebeenexperiencedduetoits“instantnature”torespondtocustomerissues.Furtheremphasiswillbeplacedonraisingtheprofileofthismediuminthenexttwelvemonths.
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TheseweragenetworkhasexperiencedanumberofmajorchallengesincludingthereplacementoftheSimplotrisingmaininUlverstone,therepairoftheUlverstoneHelenStreetPumpstation,thecompletionofEastDevonportNorthCarolineStreetPumpStationandthereplacementofaSmithtonmajorsewermain.
Duringtheyear,ourteamsrespondedto5,197reactiveordersand1,587standingserviceordersforprogrammedmaintenanceforwaterandsewerageservices.
Our CustomersSignificantmilestoneshavebeenreachedbyourCustomerServiceTeamduringthe2011-12financialyearincluding:
•Fullimplementationofthenewbillingsystem.
•Introductionofquarterlybilling.
•Introductionofdebtormanagementsystems.
•Upgradeofourcallcentrephonesystem.
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A N N U A L R E P O R T 2 0 1 1 - 2 0 1 2
People and CultureOur People
Themajorityofourpeople-basedinitiativesarecentredonimprovedcommunication.Withthecurrentemployeeintranetgoing‘live’inAugust2011,thissignificantlyimprovedaccessibilitytoinformationforouremployees.Employeescannoweasilyaccesstheirpayrollinformation,applyforleaveonlineanddownloadanumberofrelevantpolicies,proceduresandforms.
InMay2012,weconductedaseriesofemployeeforumsandexplainedthefocusoftheCorporation’sactivitiesoverthe2012-13financialyear.
Theengagementwasfurtherreinforcedwiththefinalisationofourperformancereviewanddevelopmentplanningprogram;akeyoutcomewastheestablishmentofperformanceobjectivesfor2012-13foreveryemployee.
Wecongratulatedseveralemployeesforachievingsignificantyearsofservice.AshleyGaleachieved35yearsandDavidWalmsley,RobertWalters,andMichaelBeamishachieved25yearsservice.Reaching20yearsofservicewereGeoffreyHyland,DaleAuton,GregoryCoombes,JudithRayandPhillipBenson.10yearsofservicehasbeenachievedbyTimothyFlackandPeterMorice.
Diversity Statistics as at 30 June 2012 (full-time equivalents)
Male Female
Cradle Mountain Water Board 4 80% 1 20%
Senior Management 3 50% 3 50%
Permanent Workforce# 123.9 85% 22.1 15%
#excludingseniormanagementandtemporarystaff.
Health and Safety
Our“NoHarm”objectivehasprovidedtheimpetusbehindanumberofhealthandsafetyinitiativesoverthepasttwelvemonths.
Particularattentionhasbeenpaidtohighriskactivities,suchashandlingofhazardouschemicals,workingatheights,asbestosawarenessandexcavation/trenchingandshoring.Thishasnecessitatedthedevelopmentofproceduresandworkinstructions,provisionoftrainingandongoingcommunicationactivities.Afullauditwascompletedofallabove-groundfacilitiesinordertocomplywiththeNationalAsbestosCode,includingthedevelopmentofanAsbestosRegister.
Allemployeesconductingidentified“highrisk”activitiesarecompetencyassessedeverytwoyears.Anotheractivityoverthepastyearwhichiskeytoensuringthesafetyofourworkforceandcontractors,hasbeenthesignificant,ongoingconsultationwithkey
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stakeholdersregardingintroductionofanAlcoholandOtherDrugsCEODirectiveandassociatedprocedure.Thisdirectivewillbeimplementedearlyin2012-13.
Weengagealargenumberofcontractorsandweconducted537contractorsafetyinductionsduringtheyear.
WearewelladvancedinplanningfortheintroductionoftheWorkHealthandSafetyActinJanuary2013aspartofthenational“harmonised”approachtoHealthandSafety.
Ourcommitmenttoworkplacesafetywasrecognisedinthe2011WorkSafeTasmaniaAwardsinOctoberandwewerea“finalist”and“highlycommended”intheBestNewWorkerProgram.
WhilstwehavealongwaytogoitispleasingtonotethatourLTIFRwasreducedfrom16.2in2010-11to12.3in2011-12.
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preparingforthefuture
Training and Development
Itisapriorityforustoensurethatemployeesareprovidedwitheveryopportunitytoachievetheirpotentialandthattheyhavetheskillstoworksafelyatalltimes.
Atotalof1,119trainingattendanceswererecordedfor2011-12.Currently,wehave40employeesenrolledinqualificationsatCertificateIIIlevelorhigher.
Wewerefortunatetobeawardedfundingfor22employeestoundertakeCertificateIIIleveltrainingorhigherundertheProductivityPlacesProgram,ajointCommonwealth/Statefundedprogramthataimstosubstantiallyincreasethenumberofworkerswithhigherqualifications.
FundingwasalsoreceivedundertheWorkplaceEnglishLanguageandLiteracyProgram,anAustralianGovernmentinitiativetoassistworkplacetrainingwherelanguage,literacyornumeracysupportisneeded.
Trainingneedsarebeingregularlyreviewedthroughanup-to-datefunctionalneedsanalysisofallexistingpositions.
Price and Service PlanThedevelopmentofthePriceandServicePlanwasamajorprojectin2011-12.Thisplansetsthepricesandservicestandardsfortheorganisationforthenextthreeyears,commencingon1July2012.
Theobjectivesoftheplanareto:
•Overtime,transitionexistingcustomertariffsto‘targettariffs’thatachieveequitypricingovertheregion.
•Improveproductandcustomerservicestandards.
•Setpricepathswhichminimisepriceshockstocustomers.
Thismajorprojectincorporated:
•Forecastingdemandonourservices.
•Analysingourcurrentandpotentialrevenueandexpenditure.
•Determiningtypesofregulatedservicesandchargingarrangements.
•Settingpricesthattakeintoconsiderationtheremovalof‘waterallowances’.
•Communityandstakeholderengagement.
•ConsultationwithRegulators.
Development ApplicationsDuringtheyear,345developmentapplicationsand187buildingapplicationswereprocessed,comparedwith347developmentapplicationsand154buildingapplicationsfromthepreviousyear.
Wefinalisedservicearrangementswithanumberofsubstantialprojects,includingtheHarveyNormanHomemakerCentreinDevonport,theTasmanianDairyProductsCoLtdmilkprocessingdevelopmentinSmithtonandtheLionLtdcheesefactorydevelopmentinBurnie.
Capital Works Program and Highlights
Capital Works
Atotalof$26.4millionincapitalworkswasexpendedin2011-12.
North Caroline Street Sewage Pump Station, Devonport (Project Budget $2.8 million – this year $0.8 million)
ThisisthelargestsewagepumpstationinDevonport.ItreceivessewagefrompropertiesinWestDevonportandpumpsittothePardoeTreatmentPlant.
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A N N U A L R E P O R T 2 0 1 1 - 2 0 1 2
Servicingandrefurbishmentoftheoldpumpstationhasbeencompletedandanewby-passpumpinstalledtoincreasecapacity.Asignificantodourproblemhasbeenovercomebytheinstallationofanodourcontrolsystem.Anemergencygeneratorhasbeeninstalledandpowerfailuresshouldnotimpactupontheoperationsofthepumpstation.Theupgradeisscheduledforcompletioninearly2012-13.
Water Metering Project ($5.2 million)
Atotalof12,300meterswereinstalledduringtheyearonun-meteredpropertiesandreplacementofoldmeters.Fundingof$1.95millionwasreceivedfromtheCommonwealthGovernmentforthisproject.
Sewage Treatment Plant Compliance ($3.7 million)
CradleMountainWaterisplacingapriorityonimprovingthetreatmentefficiencywhichalsoenhancescomplianceofoursewagetreatmentplants.PrioritisingoftheplannedworkswasachievedthroughthedevelopmentoftheWastewaterManagementPlan.
Improvementstypicallyincludeupgradeofcontrols,processmodifications,reductionofinflowandinfiltrationandupgradeofdisposalinfrastructure.TheplantswhereworkhascommencedareSheffield,Wynyard,Smithton,Railton,Ulverstone,Burnie,BoatHarbour,PortSorellandPardoe(Devonport).
Dam Safety and Compliance Works Upgrades
AfiveyearDamSafetyPlanhasbeendevelopedthatidentifiesworkrequiredtoimprovestoragecapacityandwaterflows.Theseincludeinterventionssuchasspillwayupgrades,flowmeasurementtomonitorseepage,pipeworkandvalveenhancements.Majorprojectsthatfollowedfromthisare:
•LakeIsandula(Gawler)-UpgradeofspillwaycompletedinDecember2011.
•ConglomerateCreekDam(Queenstown)-SafetyreviewwhichisscheduledforcompletioninOctober2012.
•PetDam(Ridgley)-UpgradeofvalvesandpipeworkintheoutlettowerwhichisscheduledforcompletioninDecember2012.
Upgrade of Smithton Sewer Main ($3.5 million)
Thereplacementof1.8kmoftheSmithtonsewermainisprogressingwell.ThispipelineisoneofthethreemainsewersinSmithton.Theprojectalsoinvolvestheinstallationofanodourcontrolunit.Thesewerconstructionisdueforcompletioninearly2012-13intimetoaccepteffluentfromthenewTasmanianDairyProductsCoLtdmilkprocessingfactory.Theodourcontrolisplannedtobeoperationalearlyin2013.
Inflow and Infiltration Investigations and Interventions ($1.1 million)
CradleMountainWaterhaslaunchedanintensiveinflowandinfiltrationreductionprograminRosebery,LatrobeandSheffield.Thepurposeofthisprojectistoreducethevolumeofstormwaterthatenterstheseweragesystemimposinghydraulicloadonthepipenetwork,pumpstationsandthetreatmentplant.Manholeinspectionsandsmokeanddyetestingtoidentifypointsofingresswillbecompletedinearly2012-13.Testingdatawillbereviewedandaworksprogramwillbedevelopedtoaddresstheidentifiedproblems.Abudgetallocationof$1.1millionisavailableforremediationintheselectedareas.
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preparingforthefuture
Supervisory Control and Data Acquisition (SCADA) System Upgrade (Budget $7.2 million over eight years)
CradleMountainWaterisseekingtoenhanceandstandardiseourcurrentSCADAandtelemetrysystems.Theprojectwillalsodeliverefficienciesthroughimprovedservicedprovisionthroughlocalandremotemonitoring,alarmingandcontrolofallinstallations(treatmentplants,pumpstations).TheinstallationoftheSCADAcentralcontrolsystemisfinishedandremotesiteswillbeprogressivelyconnectedastheupgradesarecompleted.Theprojectwillrunoveraperiodofeightyears,upgradingsitesaccordingtoriskandcriticality.
Geographic Information System (GIS) ($0.46 million for this year)
ThefocusoftheGISduring2012-13willbetorespondtothecorporaterequirementsofprovidingwebandmobilesolutionsforCradleMountainWater.Thiswillbeachievedthroughthecontinuedprocessofdevelopingourabilitytocaptureandvalidatedatathroughourmobilesolution(e-book)andweb-basedGISinterface.
Replacement of Access Ladders and Pit Lids (Budget $2.047 million over five years)
InlinewithCradleMountainWater’semphasisonoccupationalhealthandsafety,thisprojectinvolvesthereplacementormodificationofsewagepumpstationaccesslidswithpurposedesignedlightweightlidswithspecialsafetyfeatures.Thisisanongoingprojectexpectedtobecompletedoverthenextfiveyears.
Waratah Treatment Plant ($1.6 million)
AnewwatertreatmentplanthasbeenconstructedforWaratahconsistingofthelatesttechnologymembranefiltration.Constructionwascompleted,theplantcommissionedthenofficiallyopenedinAugust,2012.
Major Planning Initiatives
King Island – Currie – Grassy Water Supply System
TheaimofthisprojectistoimprovethesecurityandqualityofthewatersupplytoCurrieandGrassy.Planningincludesfortheschemetobeimplementedinprogressivestages,withprojectcompletionscheduledfor2017.Thedesignconceptandthecostestimatesoftheschemearebeingdeveloped.
Helen Street Pump Station, Ulverstone (Budget $1.5 million)
Planning,designandtendersweresoughtfortheupgradetotheHelenStreetPumpStation.Thiswillinvolvethereplacementofpumps,installationofodourcontrolandastandbygeneratortoprovideemergencypower.ContractshavebeenawardedandworkcommencedonsiteinAugust2012.
Burnie/Cam Link Water Main ($3.5 million)
TheobjectiveofthisprojectistoprovideSomersetandWynyardwithtreatedwaterfromtheBurniereticulationsystemthroughanewlinkingwatermain.Discussionswithlandownersanddetaildesignworksareprogressing.Theconstructionofthewatermainisexpectedin2015-16.
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A N N U A L R E P O R T 2 0 1 1 - 2 0 1 2
Our People
•Thecompletionoftheworkforceoptimisationstudywillensurewehavetherightnumbersofpeoplewiththerightskillmix,intherightplaces,todeliverimprovinglevelsofservice.
•ThroughtheongoingimplementationofourNo-Harmphilosophy.
Our Processes
•Throughongoingreviewofourkeyprocessesusedtodeliverourservices,wecontinuetostriveforoperationalexcellenceandefficiencywithatargetofannualcostgrowthatorbelowCPI-1%.
Thecontinuedfocusoncommunicationandconsultationwithstaff,customersandotherstakeholderswillbepivotalinmovingforwardsuccessfully.
IwouldliketothanktheBoard,theexecutiveandmanagementteamandallCradleMountainWateremployeesfortheirongoingcommitmenttoourorganisationandourcustomers.
Andrew Kneebone
ChiefExecutiveOfficer
Dam Management Plan
ThisyearsawtheimplementationandcompletionoftheDamManagementPlan.Theplanprovidesanoverviewof15damsownedandmanagedbyCradleMountainWater.Theplancontainsinformationabouttheeffectivemanagementofthedamstoensuretheycomplywithsafetyrequirements.
TheDamManagementPlanisthefinalplanwearerequiredtodevelopbythedamsafetyregulatorandthenreportoncomplianceeachyear.ThisplancomplementsthesuiteofplansthatcomeundertheAssetManagementPlan:
•WastewaterManagementPlan.
•DrinkingWaterQualityManagementPlan.
•EmergencyManagementPlan.
Thesemanagementplansprovidethebasisforcontinuedimprovementsinourinfrastructureandsystems.TheoutcomesandprioritiesoftheplanswereusedfordevelopingthePriceandServicePlan,whichisthefoundationfortheannualCorporatePlan.
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Complaints and Information Requests
Complaints to the Ombudsman
Atotalof28complaintswereescalatedtotheOmbudsmanduringtheyear.
Information Requests
ThisyearwereceivedonlyonerequestforinformationundertheRighttoInformationAct2009.Thisrequestrelatedtowaterqualityanalyses.
TherewerenoappealsandnodisclosuresmadeunderthePublicInterestDisclosuresAct2002.
Looking to the Future
Ourkeyobjectivesfortheyearaheadare:
Our Customers
•ThroughtheimplementationofaCustomerServiceImprovementStrategy,theCorporationestablishesaplantoachievetheservicestandardsoutlinedinourPriceandServicePlan.
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preparingforthefuture
Corporate Governance
Governanceisanumbrellatermthatcoverstheadministrationofanorganisation,andtheinteractionbetweenitsBoard,seniormanagementandcorporatestakeholders.AtCradleMountainWatergovernanceisanon-goingprocessof:
•Settingappropriatestrategicdirectiontoensureweremainasustainable,resilientorganisation.
•Managingrisktomitigatelossandseizeopportunity.
•Engagingwithstakeholdersandthecommunitytoensureweunderstandourobligationsandmeettheirexpectations.
•Makingdecisionssupportedbysolidanalyticalevidence.
Wearecommittedtogoodgovernancetoprovideatransparent,accountable,fairandresponsiveapproachfordirectingandcontrollingtheorganisation.Weachievegoodgovernancethrough:
•ClearlydefinedrolesandresponsibilitiesfortheBoard,theChiefExecutiveOfficerandexecutivemanagementteam.
•ImplementationofagovernanceframeworkthatalignswithASXcorporategovernanceprinciples.Areportoncompliancewiththegovernanceprinciplesisavailableonourwebsitewww.cmwater.com.au
•EstablishmentofBoardCommittees.
•Implementationofnumerousstrategicpoliciesandproceduresatalllevelsthroughouttheorganisation.
ManagementhasreportedtotheBoardontheeffectivenessofinternalcontrolandriskmanagementsystems,andprovideditsdeclarationinaccordancewithrelevantpartsofs.295AoftheCorporationsAct2001.
Legislative Authority and Formal Governance
CradleMountainWaterwasformedon13November2008undertheCorporationsAct2001andpursuanttotheWaterandSewerageCorporationsAct2008(WSCA).ItisgovernedbytheConstitutionfortheTasmanianWaterandSewerageCorporation(North-WesternRegion)PtyLimited,whichisapprovedbytheTasmanianParliament.
TheWSCAmandatesgovernancefeaturesincludingtherightsandresponsibilitiesofourownercouncils,andthesectionsoftheCorporationsAct2001thatareformallydisplacedandtherefore,donotapply.
TheprimarypurposesoftheCorporationare:
•Topromotetheefficientdeliveryofwatersupplyandprovisionofsewerageservices.
•Toencouragewaterconservation,demandmanagementofwaterandthere-useofwateronaneconomicandcommercialbasisand;
•Tobeasuccessfulbusinessand,tothisend:
-operateouractivitiesinaccordancewithgoodcommercialpractice;and
-maximisesustainablereturnstoourshareholders.
WeareownedinequalsharesbytheninelocalgovernmentcouncilsintheNorth-Westernregionand,assuch,aresubjecttotheShareholder’sLetterofExpectations(SLE).TheSLEcommunicatesthehigh-levelperformanceexpectationsandstrategicprioritiestoourBoard.
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A N N U A L R E P O R T 2 0 1 1 - 2 0 1 2
Corporate Governance
WearepresentlysubjecttothreeTreasurer’sInstructions.TheserelatetotheminimumcontentofourCorporatePlan,andourobligationstopaybothincometaxequivalentsandloanguaranteefeestoourowners.
Board Role and Structure
UnderourConstitution,theBoard’sroleistomanagethebusinessoftheCorporationinallmatters,unlesstheyarethespecificresponsibilityofownercouncils.TheBoardhasdeterminedwhichmattersitwillmanageexclusively,withtheremainderdelegatedtotheCEO.AsummaryofthisinformationisavailableintheGovernancesectionofourwebsite.
TheWSCAprescribesthecompositionoftheBoardsofallfourTasmanianWaterandSewerageCorporations.ThisissignificanttoCradleMountainWaterassomeDirectorsarecommontotheotherCorporations.AllDirectorsoftheRegionalCorporationsarenon-executiveandindependentintermsoftheexternalrelationshipswiththeCorporations.
Directors’ Background, Terms and Meeting Attendances
Miles Hampton BEc (Hons), FCPA, FCIS, FAICD
Appointed Director 26 November 2008Appointed Chairman 1 January 2011
MrHamptonwasappointedChairmanofthefourTasmanianWaterandSewerageCorporationsinJanuary2011,havingbeenaDirectoroftheCorporationssinceNovember2009.
HewastheChairmanofthebulkwaterauthority,HobartWater,from2005to2009.
Inarelatedcapacity,MrHamptonisamemberoftheInfrastructureAdvisoryCouncilandtheTasmanianPlanningCommission.TheseappointmentsrelatetotheroleofChairmanofthewaterCorporationsandhisinvolvementisprescribedundertherelevantTasmanianlegislation.
MrHamptonisadirectorofMyStateLimited,AustralianPharmaceuticalIndustriesLtd,ForestryTasmaniaandtheVanDiemen’sLandCompany.HeisChairmanoftheUTASFoundation.
HewasManagingDirectorofASXlistedagribusiness,RobertsLimited,for20yearsuntilhisresignationin2006.
Grant Atkins FLGMA, FAICD, JP
Appointed 26 November 2008 Term 1
MrAtkinsisformerGeneralManageroftheLatrobeandKentishCouncilsandisalsoaDirectorwiththeDulvertonWasteManagementAuthority.
MrAtkinshaspreviouslyservedasacouncilrepresentativememberonvariouslocalgovernmentauthoritiesincludingtheCradleCoastWaterAuthority.HeiscurrentlyamemberoftheTasmanianLocalGovernmentAssociationStandardsPanelandtheStateGrantCommission.
Brian Bayley DipCivEng
Appointed 26 November 2001
MrBayleyhasover35yearsexperienceinthewaterindustry,holdingthepositionofManagingDirectorofMelbourneWaterforsevenyears,upuntil2005.HeisalsoaformerChairmanandDirectorofboththeWaterServicesAssociationofAustraliaandtheVictorianWaterAssociation.
MrBayleyiscurrentlyaCivilEngineeringConsultantandbringsabroadportfolioofindustryknowledgeandchangemanagementexperiencetotheCorporation.
HeistheChairmanoftheSafetyandHealth,EnvironmentandPublicHealthCommitteeforallTasmanianWaterandSewerageCorporations.
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preparingforthefuture
Sarah Merridew BEc, FCA, FAICD
Appointed 10 March 2011
MsMerridewisaCharteredAccountantandaDirectorofMyStateLimitedandTasmanianRailwayPtyLtd.
SheisHonoraryTreasureroftheRoyalFlyingDoctorServiceTasmaniaInc.andactivelyinvolvedwithothercommunityorganisations.
MsMerridewisaformerDirectorofTasmanianPublicFinanceCorporationandapartnerofDeloitteToucheTohmatsu.Shehasextensiveexperienceinprovidingaudit,riskmanagement,governance,andbusinessadvisoryservicestothepublicandprivatesectors.
MsMerridewistheChairoftheAuditandRiskCommitteesforallfourTasmanianWaterandSewerageCorporations.
Dr Daniel Norton BAgricSci (Hons), MEcon, PhD in Economics and Business,
International Advanced Management Program.
Appointed 26 November 2008
DrNortonisanexperiencedChairmanandCEOwhohasworkedintheelectricityindustry,centralgovernmentagenciesandininternationalcommoditymarketing.
Hehasfirst-handexperienceacrossabroadrangeofareasincludingelectricity,transport(includingportsandrail),privatisationandcorporatisation,financialmanagementreform,education,waterservices,healthservices,informationandcommunicationstechnology,agriculturalmarketingandpublicsectormanagement.
HisothercurrentBoardappointmentsincludeChairman,TasmanianPortsCorporationPtyLtd,ChairmanMenziesResearchInstituteTasmaniaandDeputyChairmanAuroraEnergyPtyLtd.
Tony MacCormick BChemEng (Hons), DipBus, FAICD
Appointed 26 November 2008 Term 1, resigned 23 November 2011
MrMacCormickwasformerlytheChairofCradleCoastWater,beforetakingupadirectorshipwithCradleMountainWater.HewasalsoaDirectoroftheDulvertonWasteManagementAuthoritywhilstaDirectorofCradleMountainWater.
MrMacCormickbroughttotheBoardextensiveexperienceinthewaterindustrywithSiemensWaterTechnologiesandwasaDirectoroftheCooperativeResearchCentreforWasteManagementandPollutionControl.
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A N N U A L R E P O R T 2 0 1 1 - 2 0 1 2
Board Committees
TheBoardassumesoverallresponsibilityforcorporategovernanceandmonitorstheperformanceoftheCorporation,bothdirectlyandthroughthefollowingBoardCommittees:
•AuditandRiskCommittee.
•Safety,HumanResources,EnvironmentandPublicHealthCommittee.
Audit and Risk Committee (AAR)
TheAARCommitteeisresponsibleforensuringthattheCorporation’saccountabilityandcontrolframeworksareappropriateandeffective.Thisisachievedthroughthereview,monitoringand,wherenecessary,recommendationofimprovementstothe:
•Internalcontrolprocesses.
•Financialreportingprocesses.
•Corporation’sinternalauditfunction.
•Riskmanagementandcomplianceprocesses.
TheCommitteemetfivetimesduring2011-12andcomprisesthreenon-executivedirectors:SarahMerridew(Chair),GrantAtkinsandDrDanNorton.
Safety, Human Resources, Environment and Public Health Committee (SHREP)
TheroleoftheSafety,HumanResources,EnvironmentandPublicHealthCommitteeistoassisttheBoardinfulfillingitsresponsibilitiesrelatingto:
•Workplacehealthandsafety.
•Humanresourcemanagementanddevelopment.
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•Employeeremunerationandperformancemanagement.
•Environmentalmanagementandcompliance.
•Publichealthperformanceandcompliance.
InMarch2012,theSHREPCommitteerevieweditschartertoremovehumanresourcemanagementanddevelopment,employeeremuneration,andperformancemanagement;returningoversightoftheseareastotheBoard.
TheSHREPCommitteemetfourtimesduring2011-12withtheCommittee’scompositionchangingduringthecourseoftheyear.AtyearendtheCommitteecomprisedofthreenon-executiveDirectors:BrianBayley(Chair),GrantAtkinsandDrDanNorton.
Table 3 Meeting Attendances 2011-12
Board Meetings (14 held) AAR Committee (5 held) SHREP Committee (4 held) Strategic Workshop (1 held)
Attended Eligible Attended Eligible Attended Eligible Attended Eligible
Miles Hampton 14 14 5 5 3 4 1 1
Grant Atkins 12 14 4 5 4 4 1 1
Brian Bayley 14 14 1 0 4 4 1 1
Tony MacCormick (resigned23November2011)
8 8 1 0 1 1 0 0
Sarah Merridew 13 14 4 5 0 0 1 1
Dr Dan Norton 14 14 5 5 2 2 1 1
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Directors’ Report
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TheDirectorsofTasmanianWaterandSewerageCorporation(North-WesternRegion)PtyLtd,tradingasCradleMountainWater,presentthefinancialreportoftheCorporationforthefinancialyearended30June2012.InordertocomplywiththeprovisionsoftheCorporationsAct2001,theDirectors’Reportasfollows:
Principal ActivitiesTheprincipalactivitiesoftheCorporationduringthecourseofthefinancialyearwere:
•ProvidingwaterandsewerageservicesforresidentialandcommercialcustomersthroughoutNorth-WesternTasmaniaand;
•Undertakingmaintenance,upgradinganddevelopmentworksonwaterandsewerageassets,andpreparingstrategicassetdevelopmentplansforthefuture.
Review of OperationsDuringthefinancialyear,approximately44,000propertieswereprovidedwithservicesinvolvingtheprovisionofwaterandremovalofwastewater.
TheCorporationreportedaprofitaftertaxof$462,000fortheyearended30June2012(2010-11:$1,874,000).
AmoredetailedreviewoftheCorporation’soperationsduringtheyeariscontainedelsewhereinthisAnnualReport.
Environmental RegulationsTheCorporation’soperationsaresubjecttovariousenvironmentalregulationsunderbothCommonwealthandStatelegislation.TheBoardhastheresponsibilitytomonitorcompliancewithenvironmentalregulations.TheDirectorsarenotawareofanysignificantbreachesduringtheyearcoveredbythereport,apartfromthefailureoftheCorporation’ssewagetreatmentplantstoregularlycomplywitheffluentdischargelicencessetbytheEnvironmentalRegulator.TheCorporationhasanagreedWastewaterManagementPlanwiththeEnvironmentalRegulatoroutlininginitiativesandimplementationschedulestoaddresstheRegulator’spriorities.
Dam PortfolioTheCorporationmanagesitsdamsusingaRiskAssessmentandMitigationprocess,withtheaimofcompliancewithNationalCouncilonLargeDams(ANCOLD)DamSafetyManagementGuidelines2003.ThosedamsthatfalloutsideanycriteriaoftheGuidelines,includingtheSocietalRiskCriteria,arebeingmanagedunderaDamSafetyManagementPlanwhichhasbeenprovidedtotheTasmanianDamSafetyRegulator.AnannualreportisprovidedtotheDamSafetyRegulatorregardingthestatusofalldamsandtheCorporationhasanobligationtoimmediatelyadvisetheRegulatorofadversedevelopmentsindamstatus.
DividendsTheDirectorsdidnotdeclareaninterimdividendduringthe2011-12financialyear.
InlightofthecashpositionoftheCorporation,theDirectorshaveresolvednottodeclareafinaldividendfor2011-12,(2010-11:$Nil).Inaccordancewithaccountingstandards,nofinaldividendisrecognisedinthefinancialstatementsunlesstheyaredeclaredpriortothebalancedate.
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A N N U A L R E P O R T 2 0 1 1 - 2 0 1 2
Directors’ Report
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Subsequent Events Therehavebeennomattersorcircumstancesthathavearisensincetheendofthefinancialyearthathavesignificantlyaffected,ormaysignificantlyaffecttheCorporation,itsoperations,resultsofoperationsorstateofaffairsinfuturefinancialyears.
Likely Future Developments
TheCorporationmaybeimpactedbythefollowingfuturedevelopments:
InJune2012,membersoftheLocalGovernmentAssociationofTasmaniapreparedarecommendationtotheTreasurerofTasmaniatomergethethreewaterCorporations(BenLomondWater,CradleMountainWaterandSouthernWater)andthemanagementservicesproviderOnstream.Toeffectthisrecommendation,theTreasurerwillneedtosponsorachangetotheexistinglegislation.
TheintroductionbytheCommonwealthGovernmentofthecarbonschemeon1July2012willimpactthefuturefinancialresultsoftheCorporation.AtthedateofthisreporttheDirectorsareunabletodeterminewhetherthisimpactwillhaveamaterialeffectontheCorporation.
InformationonlikelyfuturedevelopmentsintheoperationsoftheCorporationisincludedelsewhereinthisAnnualReport.
Remuneration of Directors and Senior ManagementRemuneration Report
Thisremunerationreport,whichformspartoftheDirectors’report,setsoutinformationabouttheremunerationoftheCorporation’sDirectorsanditsseniorexecutivesforthefinancialyearended30June2012.Theprescribeddetailsforeachpersoncoveredbythisreportaredetailedbelowunderthefollowingheadings:
•Directorandseniorexecutivedetails.
•Remunerationpolicy.
•Relationshipbetweentheremunerationpolicyandthecompanyperformance.
•RemunerationofDirectorsandseniorexecutives.
•Keytermsofemploymentcontracts.
Director and Senior Executive Details
ThefollowingpersonsactedasDirectorsofthecompanyduringorsincetheendofthefinancialyear:
•MrMilesHampton
•MrGrantAtkins
•MrBrianBayley
•MsSarahMerridew
•DrDanNorton
•MrTonyMacCormickResigned23November2011
OtherdetailsregardingDirectorsandtheirattendanceatBoardmeetingsandrelevantcommitteemeetingsareprovidedelsewherewithinthisAnnualReport.
Theterm‘seniorexecutive’isusedinthisremunerationreporttorefertothefollowingpersons:
•MrAndrewKneebone(ChiefExecutiveOfficer)
•MrDougDoherty(ExecutiveManager–ChiefOperatingOfficer)
•MsJuliePoole(ExecutiveManager–CustomerServices)
•MrGraemeRocke(ExecutiveManager–CommercialServices)
•MsLouiseMaconachie(ExecutiveManager–Regulation–appointed19September2011)
•MsSandraWilson(ExecutiveManager–PeopleandCulture-appointed17October2011)
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•MrBarryOmundson(ExecutiveManager–Operations–resigned23September2011)
•MrIanHutchinson(ExecutiveManager–PeopleandCulture–resigned14October2011)
Exceptasnoted,thenamedpersonsheldtheircurrentpositionforthewholeofthefinancialyearandsincetheendofthefinancialyear.
Remuneration PolicySenior Executives’ Remuneration
TheBoardhasapprovedaremunerationframework,developedinconjunctionwithindependentremunerationspecialists,Mercer,andbenchmarkednationally.Theframeworkappliestoseniorexecutives,linemanagersandspecificprofessionalorexpertpositionsandtheCEOisobligedtoworkwithinitsparameters.
TheremunerationofseniorexecutivesisbasedonTotalEmploymentCosttotheCorporation.Componentsofremunerationcanincludecashandnon-cashalternativesaswellasanyfringebenefitstaxincurred.Noequity-basedcomponentsareofferedaspartofanyremuneration.
An‘atrisk’element,inadditiontoTotalEmploymentCost,hasbeenintroducedforseniorexecutiveswithamaximumpossibleamountdeterminedbytheBoard.Theperformanceoftheseniorexecutivesismeasuredagainstcriteriaagreedannuallyinadvance.
Non-Executive Directors’ Remuneration
UndertheWaterandSewerageCorporationsAct(WSCA),thestate-wideOwners’RepresentativeGroup(ORG)isresponsiblefordeterminingtheremunerationandallowancesfornon-executiveDirectors.TheORGisappointedbytheownersoftheRegionalCorporationsandconsistsofthreepeoplefromeachregionappointedbyspecialmajority.TheORGmakesitsdeterminationofremunerationbasedontherecommendationoftheSelectionCommittee,asdescribedinWSCA.
Non-ExecutiveDirectorsareremuneratedbywayoffixedfeesandsuperannuationpaymentsasrequiredbylegislation.Nootherleave,terminationorretirementbenefitsareaccruedorpaidtoDirectors.
DirectorsarealsoentitledtoreimbursementofexpensesincurredwhileattendingtoCorporationbusiness.
IndependentDirectors’remunerationisincreasedannuallybyCPI,providedthatanindependentreviewisnotrequestedbytheSelectionCommittee,ORGortheBoardasawhole.
Relationship Between the Remuneration Policy and the Company Performance
TheCorporation’sremunerationpolicyhasbeendesignedtoaligntheobjectivesofseniorexecutiveswithbusinessobjectives,byprovidingbothafixedremunerationcomponentandaperformancebasedcomponent.
TheCEOandallseniorexecutivesareappointedunderemploymentcontractswhichincludeperformance-basedpayments.‘Seniorexecutiveperformanceobjectivesareestablishedannually’.TheCEO’sperformanceisreviewedbytheBoardatleastannually.Forotherseniorexecutives,theCEOreviewsperformanceandreportstotheBoardatleastannuallyandrecommendsanysubsequentperformancebasedpayment.Thereviewandanypaymentsarefinaliseduponcompletionoftheauditedfinancialstatements.
Whilstallincentivesarelinkedtopre-determinedperformancecriteria,theBoardhasultimatediscretioninapprovingpaymentofthese.
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A N N U A L R E P O R T 2 0 1 1 - 2 0 1 2
2012 Financial Year 2011 Financial Year
Short-termbenefits Postemploymentbenefits
Short-termbenefits Postemploymentbenefits
Fees
Bonu
s
Supe
r-an
nuat
ion
Tota
l
Fees
Bonu
s
Supe
r-an
nuat
ion
Tota
l
Non-executiveDirectors $ $ $ $ $ $ $ $
MrMilesHampton–Chair 36,348 - 3,271 39,619 26,616 - 2,395 29,011
MrGeoffWillis(FormerChair,retired31/12/10)
- - - - 18,063 - 1,626 19,689
MrGrantAtkins 33,580 - 3,022 36,602 29,039 - 2,614 31,653
MrBrianBayley 21,665 - 1,950 23,615 17,326 - 1,559 18,885
MrTonyMacCormick(resigned23/11/11)
12,818 - 1,154 13,972 28,845 - 2,596 31,441
MsSarahMerridew 20,252 - 1,823 22,075 5,232 - 471 5,703
DrDanNorton 21,909 - 1,972 23,881 20,261 - 1,823 22,084
Total 146,572 - 13,192 159,764 145,382 - 13,084 158,466
Remuneration of Directors and Senior Executives
ThefollowingtableofbenefitsandpaymentsdetailsthecomponentsofremunerationforeachpersonthatactedasaDirectoroftheCorporationduringorsincetheendofthefinancialyear:
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2012 Financial Year 2011 Financial Year
Base Total Base Total
$30,000-$39,999 1 - - -
$40,000-$49,999 1 - - -
$60,000-$69,999 - 1 - -
$70,000-$79,999 1 2 - -
$80,000-$89,999 1 - 1 -
$90,000-$99,999 1 1 1 1
$100,000-$109,999 - - - 1
$110,000-$119,999 - 1 1 -
$120,000-$129,999 - - 1 -
$130,000-$139,999 1 - - 2
$140,000-$149,999 1 - 1 -
$150,000-$159,999 - 1 - -
$160,000-$169,999 - 1 1 1
$180,000-$189,999 - - - 1
$190,000-$199,999 - - 1 -
$200,000-$209,999 1 - - -
$220,000-$229,999 - - - 1
$230,000-$239,999 - 1 - -
8 8 7 7
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Thefollowingtabledisclosestheremunerationdetailsinbandsforeachpersonthatactedasaseniorexecutiveofthecompanyduringorsincetheendofthefinancialyear:
Base=Basesalary
Total=Totalsalaryincludingbasesalary,superannuationand,whereapplicable,bonusesand/orterminationbenefits.The‘atrisk’componentislimitedto10%oftheTECforseniorexecutivesand15%ofthetotalemploymentcostfortheCEO.
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A N N U A L R E P O R T 2 0 1 1 - 2 0 1 2
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Key Terms of Employment Contracts
Senior executive staff
TheemploymenttermsandconditionsofseniorexecutivesareformalisedinIndividualEmploymentAgreements.
Consistentwithlegislatedrequirements,seniorexecutivesreceiveaminimumsuperannuationguaranteecontribution,whichiscurrently9%,anddonotreceiveanyotherretirementbenefits.However,someindividualshavechosentosacrificepartoftheirsalarytoincreasepaymentstowardssuperannuation.Uponretirement,seniorexecutivesarepaidemployeebenefitentitlementsaccruedtothedateofretirement.
TermsofemploymentrequiretheseniorexecutiveoftheCorporationprovideaminimumnoticeperiodpriortoterminationofcontract,subjecttoconditionsoftheFairWorkAct(2009),whereapplicable.ThelengthofnoticevariesbetweenIndividualEmploymentAgreements,however,isgenerallybetweenthreetosixmonths.Undercertaincircumstances,seniorexecutivesmaybepaidaredundancy,thelevelofwhichisdependentonindividualcontractualarrangementsandlengthofcontractserved.Terminationpaymentsarenotpayableonresignationorundercircumstancesofunsatisfactoryperformance.
Independent Directors
AppointmentconditionsforindependentDirectorsarespecifiedinbothWSCAandformallettersofappointment.Theseinclude:
•maximumthreeyearterm;
•eithertheindependentDirector,theCorporationortheORGmayterminatetherelationshiponthreemonthsnoticeorimmediatelyincertainsituations;and
•theCorporationistoensurethatithasappropriateDirectors’andofficers’liabilityinsurance.
FurtherInformationabouttheremunerationofDirectorsandseniorexecutivesissetoutinNote17totheFinancialStatements.
Indemnification of Directors and Officers
Duringthefinancialyear,theCorporationpaidapremiuminrespectofaninsurancepolicycoveringtheliabilityofallcurrentDirectorsandofficersoftheCorporation.
TheCorporationhasnototherwise,duringorsincethefinancialyear,indemnifiedoragreedtoindemnifyanofficerorauditoroftheCorporationagainstaliabilityincurredassuchbyanofficerorauditor.
Proceedings on Behalf of the Corporation
NopersonhasappliedforleaveoftheCourttobringproceedingsonbehalfoftheCorporationorinterveneinanyproceedingstowhichtheCorporationisapartyforthepurposeoftakingresponsibilityonbehalfoftheCorporationforalloranypartofthoseproceedings.
TheCorporationwasnotapartytoanysuchproceedingsduringtheyear.
Auditor’s Independence Declaration
Theauditor’sindependencedeclarationisincludedonpage28.
Rounding Off of Amounts
TheCorporationisofakindreferredtoinASICClassOrder98/0100dated10July1998andinaccordancewiththatClassOrder,amountsinthefinancialreportandDirectors’Reporthavebeenroundedtothenearestthousanddollars,unlessotherwisestated.
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ThisDirectors’ReportissignedinaccordancewitharesolutionofDirectorsmadepursuanttos.298(2)oftheCorporationsAct2001.
OnbehalfoftheDirectors
Miles Hampton Sarah Merridew
Chair Director
10August2012
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Financial Report
Note Contents Page Auditor’sIndependenceDeclaration 28 Directors’Declaration 29 IndependentAuditor’sReport 30 StatementofComprehensiveIncome 32 StatementofFinancialPosition 33 StatementofCashFlows 34 StatementofChangesinEquity 351 GeneralInformation 362 ApplicationofNewandRevisedAccountingStandards 363 SummaryofSignificantAccountingPolicies 374 Revenue 465 Expenses 466 IncomeTaxEquivalents 487 DividendsProvidedFororPaid 508 CurrentAssets 519 Property,PlantandEquipment 5210 Intangibles 5511 CurrentandNon-currentLiabilities 5612 Members’Equity 5713 Superannuation 5814 CommitmentsforExpenditure 6115 ContingentLiabilities 6216 RemunerationofAuditors 6217 CompensationofKeyManagementPersonnel 6218 RelatedPartyDisclosures 6219 NotestotheStatementofCashFlows 6620 FinancialInstruments 6721 ControllingEntities 7222 InvestmentinAssociate 7323 SubsequentEvents 73
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10 August 2012
FINANCIAL REPORT 1 JULY 2011 TO 30 JUNE 2012 DIRECTORS’ DECLARATION
The directors declare that:
a) The attached financial statements and notes thereto comply with accounting standards; b) The attached financial statements and notes thereto give a true and fair view of the financial position and
performance of the Corporation;
c) In the Directors’ opinion, the attached financial statements and notes thereto are in accordance with the Corporations Act 2001 (Cth); and
d) In the Directors’ opinion, there are reasonable grounds to believe that the corporation will be able to pay its
debts as and when they become due and payable.
e) The Directors have been given the declarations as set out in Section 295A of the Corporations Act 2001 (Cth) from the Chief Executive Officer and Chief Financial Officer for the financial year ended 30 June 2012.
Signed in accordance with a resolution of the directors made pursuant to s.295 (5) of the Corporations Act 2001 (Cth). Miles Hampton Chair Sarah Merridew Director
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Statement of Comprehensive Income FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012
Tasmanian Water and Sewerage Corporation (North-Western Region) Pty Ltd
Notes 2012 $’000
2011$’000
Continuing Operations
SalesRevenue 4 52,041 48,189
OtherIncomefromOperatingActivities 4 1,225 3,017
ShareofNetProfitofAssociate-EquityMethod 22 14 43
RawMaterialsandConsumables 5 (4,928) (4,390)
DepreciationandAmortisationExpenses 5 (12,698) (12,424)
EmployeeandRelatedExpenses 5 (13,782) (12,408)
OperationsandMaintenanceExpenses 5 (6,926) (5,841)
AdministrationExpenses 5 (8,082) (7,910)
Net Profit before Net Financing Costs 6,864 8,276
FinancingIncome 4 81 69
FinancingExpenses 5 (6,291) (5,568)
Net Financing Costs (6,210) (5,499)
Net Profit before Income Tax Equivalents Expense 654 2,777
IncomeTaxEquivalentsExpense 6.1 (192) (903)
Net Profit after Income Tax Equivalents Expense 12.1 462 1,874
Other Comprehensive Income
ActuarialGain(Loss)onDefinedBenefitPlan 13.2 (87) 190
ShareofothercomprehensivelossesofAssociate 22 (51) (19)
Incometaxrelatingtocomponentsofothercomprehensiveincome 6.2 26 (57)
Total Comprehensive Income for the Financial Year 350 1,988
TheaboveStatementofComprehensiveIncomeshouldbereadinconjunctionwiththeaccompanyingnotes.
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Statement of Financial Position FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012
Tasmanian Water and Sewerage Corporation (North-Western Region) Pty Ltd
Notes 2012 $’000
2011$’000
Current Assets
CashandCashEquivalents 8.1 2,327 2,676
Receivables 8.2 14,966 12,818
Inventories 8.3 955 849
Prepayments 133 99
Total Current Assets 18,381 16,442
Non-current Assets
Property,PlantandEquipment 9 418,890 405,316
Intangibles 10 1,926 1,511
DeferredTaxAssets 6.4 5,466 4,898
InvestmentinAssociate 22 1 38
Total Non-current Assets 426,283 411,763
Total Assets 444,664 428,205
Current Liabilities
Borrowings 11.1 25,613 10,940
EmployeeBenefits 11.2 3,354 3,169
Payables 11.3 6,564 4,235
UnearnedIncome 11.4 253 123
CurrentTaxLiability 6.3 39 836
Total Current Liabilities 35,823 19,303
Non-current Liabilities
Borrowings 11.1 70,650 72,729
EmployeeBenefits 11.2 1,119 989
UnearnedIncome 11.4 3,571 1,917
DeferredTaxLiabilities 6.4 6,812 6,928
Total Non-current Liabilities 82,152 82,563
Total Liabilities 117,975 101,866
Net Assets 326,689 326,339
Equity
RetainedProfits(AccumulatedLosses) 12.1 1,581 1,231
ContributedEquity 12.2 325,108 325,108
Total Equity 326,689 326,339
TheaboveStatementofFinancialPositionshouldbereadinconjunctionwiththeaccompanyingnotes.
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Statement of Cash Flows FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012
Tasmanian Water and Sewerage Corporation (North-Western Region) Pty Ltd
Notes 2012 $’000
2011$’000
Cash Flows from Operating Activities
ReceiptsfromCustomers 49,639 47,364
ReceiptsfromOtherSources 276 1,391
PaymentstoSuppliersandEmployees (35,233) (34,270)
GSTNetReceived 3,884 2,639
InterestReceived 81 69
InterestPaid (5,326) (4,819)
GovernmentGuaranteeFeesPaid (860) (771)
IncomeTaxEquivalentsPaid 6.3 (1,647) (1,278)
Net Cash from Operating Activities 19.1 10,814 10,325
Cash Flows from Investing Activities
PaymentsforProperty,PlantandEquipment (22,535) (13,861)
PaymentsforCapitalisedEmployeeandDirectCosts (3,033) (2,595)
PaymentsforInterest (474) (480)
ProceedsfromSaleofProperty,PlantandEquipment 334 3,102
Net Cash from / (Used in) Investing Activities (25,708) (13,834)
Cash Flows from Financing Activities
ProceedsfromBorrowings 17,741 19,816
RepaymentofBorrowings (5,146) (14,702)
GovernmentFunding-Commonwealth 1,950 -
DividendsPaid 12.1 - (467)
Net Cash from Financing Activities 14,545 4,647
Net Increase (Decrease) in Cash and Cash Equivalents (349) 1,138
Cash and Cash Equivalents at the Beginning of the Year 2,676 1,538
Cash and Cash Equivalents at the End of the Year 19.2 2,327 2,676
TheaboveStatementofCashFlowsshouldbereadinconjunctionwiththeaccompanyingnotes.
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Statement of Changes in Equity FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012
Tasmanian Water and Sewerage Corporation (North-Western Region) Pty Ltd
Notes Retained Profits / (Losses)
$’000
Contributed Equity $’000
Total Equity
$’000
Balance as at 1 July 2010 (290) 325,108 324,818
DividendsPaid 12.1 (467) - (467)
NetProfitafterIncomeTaxEquivalentsExpense 12.1 1,874 - 1,874
OtherComprehensiveIncome 114 - 114
Balance as at 30 June 2011 1,231 325,108 326,339
DividendsPaid 12.1 - - -
NetProfitafterIncomeTaxEquivalentsExpense 12.1 462 - 462
OtherComprehensiveIncome (112) - (112)
Balance as at 30 June 2012 1,581 325,108 326,689
TheaboveStatementofChangesinEquityshouldbereadinconjunctionwiththeaccompanyingnotes.
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1 General Information
TasmanianWaterandSewerageCorporation(North-WesternRegion)PtyLtd(theCorporation),tradingasCradleMountainWater,isaproprietylimitedcompanyincorporatedinAustralia.TheaddressoftheCorporation’sregisteredofficeis162PumpingStationRoad,Forth.
TheprincipalactivitiesoftheCorporationaretheprovisionofwaterandsewerageservicesforresidentialandcommercialcustomersthroughouttheNorth-WesternRegionTasmania.
2 Application of New and Revised Accounting Standards
2.1 Standards and Interpretations Affecting Amounts Reported in the Current Period (and/or Prior Periods)
NoneoftheneworrevisedStandardsandInterpretationswhichhavebeenadoptedinthecurrentperiodhaveaffectedanyoftheamountsrecognisedinthecurrentperiodoranypriorperiodandarenotlikelytoaffectfutureperiods.
2.2 New and Revised Standards and Interpretations Which Have Had No Effect on Financial Statements
ThefollowingnewandrevisedStandardsandInterpretations,thathavebecomeeffectiveforthecurrentreportingperiod,havenothadanysignificantimpactontheamountsreportedinthisfinancialreport.
Standard/Interpretation
Affected Standards
AASB2010-4 FurtherAmendmentstoAustralianAccountingStandardsarisingfromtheAnnualImprovementsProject[AASB1,7,101,134]
AASB124 RelatedPartychangestodefinitionsandcertainrelatedpartydisclosuresforgovernmentrelatedentities.
AASB2009-14 AmendmentstoAustralianInterpretation–PrepaymentsofaMinimumFundingRequirementinregardtotheCorporationsdefinedbenefitscheme.
AASB2010-6 AmendmentstoAustralianAccountingStandards–DisclosuresonTransfersofFinancialAssets
AASB1054‘AustralianAdditionalDisclosures’
AmendmentstoAustralianAccountingStandardsarisingfromTrans-TasmanConvergenceProject
AASB2010-5 AmendmentstoAustralianAccountingStandards[AASB1,3,4,5,101,107,112,118,119,132,137&139]
2.3 Standards and Interpretations in Issue Not Yet Adopted
Atthedateofauthorisationofthefinancialstatements,theStandardsandInterpretationslistedbelowwereinissuebutnotyeteffective.
Standard/Interpretation Effective for annual reporting periods beginning on or after
Expected to be initially applied in the financial year ending
AASB2010-8‘AmendmentstoAustralianAccountingStandards–DeferredTax:RecoveryofUnderlyingAssets’
1January2012 30June2013
AASB9‘FinancialInstruments’,AASB2009-11‘AmendmentstoAustralianAccountingStandardsarisingfromAASB9’andAASB2010-7‘AmendmentstoAustralianAccountingStandardsarisingfromAASB9(December2010)’
1January2013 30June2014
AASB2010-10‘FurtherAmendmentstoAustralianAccountingStandards-RemovalofFixedDatesforFirstTimeAdopters’
1January2013 30June2014
AASB2011-4‘FurtheramendmentstoAustralianAccountingStandardstoremoveindividualpersonneldisclosurerequirements’.
1July2011 30June2014
AASB13‘FairValueMeasurement’ 1January2013 30June2014
AASB2011-8‘AmendmentstoAustralianAccountingStandardsarisingfromAASB13’. 1January2013 30June2014
AASB2011-9‘AmendmentstoAustralianAccountingStandards–PresentationofotheritemsofotherComprehensiveIncome’.
1July2012 30June2013
AASB2011-10‘AmendmentstoAustralianAccountingStandardsarisingfromAASB119(September2011)
1January2013 30June2014
AASB2011-12‘AmendmentstoAustralianAccountingStandardsarisingfromInterpretation20[AASB1]
1January2013 30June2014
Notes to the Financial Statements FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012
Tasmanian Water and Sewerage Corporation (North-Western Region) Pty Ltd
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TheadoptionofthevariousAustralianAccountingStandardsandInterpretationsinissuebutnotyeteffectivearenotexpectedtomateriallyimpacttheCorporation’saccountingpolicies.TheCorporationdoesnotintendtoadoptanyofthesepronouncementsbeforetheireffectivedates.
3. Summary of Significant Accounting Policies
3.1 Statement of Compliance
Thisfinancialreportisageneral-purposefinancialreport,preparedinaccordancewiththeCorporationsAct2001(Cth),relevantAustralianAccountingStandardsoftheAustralianAccountingStandardsBoard(AASB)andotherlawswhereapplicable.ThefinancialreportalsocomplieswithInternationalFinancialReportingStandards(IFRS)andInterpretationsadoptedbytheInternationalAccountingStandardsBoard.
ThefinancialreportwasapprovedbytheBoardofDirectorson10August2012.
3.2 Basis of Preparation
Thefinancialreportispreparedonthebasisofhistoricalcost,exceptforcertainnon-currentassetsandfinancialinstrumentsthataremeasuredatrevaluedamountsorfairvalues,asexplainedintheaccountingpoliciesbelow.Historicalcostisgenerallybasedonthefairvaluesoftheconsiderationgiveninexchangefortheassets.AllfiguresunlessindicatedotherwisearereportedinAustraliandollars.
TheCorporationisofakindreferredtoinASICClassOrder98/100,dated10July1998,andinaccordancewiththatClassOrderamountsinthefinancialreportareroundedofftothenearestthousanddollars($’000),unlessotherwisestated.
Thefollowingsignificantaccountingpolicieshavebeenadoptedinthepreparationandpresentationofthefinancialreport.
3.3 Significant Accounting Judgements, Estimates and Assumptions
IntheapplicationofAASBstandards,managementisrequiredtomakejudgments,estimatesandassumptionsaboutcarryingvaluesofassetsandliabilitiesthatarenotreadilyapparentfromothersources.Theestimatesandassociatedassumptionsarebasedonhistoricalexperienceandvariousotherfactorsthatarebelievedtobereasonableunderthecircumstances,theresultsofwhichformthebasisofmakingthejudgments.Actualresultsmaydifferfromtheseestimates.Theestimatesandunderlyingassumptionsarereviewedonanongoingbasis.
Fair Value of Property Plant and Equipment
VariousassumptionsandjudgementsareutilisedindeterminingthefairvalueoftheCorporation’sproperty,plantandequipment.TheseassumptionsarediscussedinNotes3.10,3.14and9.
Defined Benefit Superannuation Fund Obligations
VariousactuarialassumptionsareutilisedinthedeterminationoftheCorporation’sdefinedbenefitsuperannuationfundobligations.TheseassumptionsarediscussedinNotes3.15and13.
3.4 Revenue Recognition
Revenueismeasuredatthefairvalueoftheconsiderationreceivedorreceivable.
Sale of Water (Including Irrigation Income)
Fixedwaterchargesarebilledandrecognisedonaquarterlybasis.VariablewatersalesarerecognisedwhenwaterismeteredaspassingfromtheCorporation’sdistributionsystemtothecustomer.Unbilledwatersalesisanestimateofthevalueofwatersuppliedtothecustomerbetweenthedateofthelastmeterreadingandtheyearend,andisincludedinwaterincomewithinsalesrevenueandinthestatementoffinancialpositionasareceivable.
Notes to the Financial Statements FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012
Tasmanian Water and Sewerage Corporation (North-Western Region) Pty Ltd
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Sewerage Income
Fixedchargesforthecollectionandtreatmentofsewagearebilledandrecognisedonaquarterlybasis.Variableseweragecharges(Industrialcustomers)arerecognisedwhenwasteismeteredaspassingfromthecustomertotheCorporation’scollectionsystem.Unbilledsewerageincome(includingtradewaste)isanestimateofthevalueofsewagetreatedonbehalfofthecustomerbetweenthedateofthelastmeterreadingandtheyearend,andisincludedinsewerageincomewithinsalesrevenueandinthestatementoffinancialpositionasareceivable.
Interest Income
Interestincomeisrecognisedasitaccrues,takingintoaccounttheeffectiveyieldonthefinancialasset.
Sale of Non-Current Assets
Thenetgain(loss)onnon-currentassetsalesarerecognisedintheStatementofComprehensiveIncomeatthedatethecontroloftheassetpassestothebuyer,usuallyatthepointanunconditionalwrittencontractissignedandthesignificantrisksandrewardsofownershiphavebeentransferredtothebuyer.Thegainorlossondisposaliscalculatedasthedifferencebetweenthecarryingamountoftheassetatthetimeofthedisposalandthenetproceedsondisposal.
Government Funded Compensation
Aspartofthe2011-12Statebudgetthegovernmentannouncedchangestotheexistingfundingarrangementswithrespecttorevenueforgone.Underthenewarrangements,theCorporationwillreceivefundingin2011-12and2012-13.InadditionseparatefundingtospecificallysupporttheCorporationoverthreeyears2011-12to2013-14hasalsobeenprovided.Anysuchcompensationpaymentsarerecordedassalesrevenueonanaccrualbasis.
Government Funded Concessions
TheCorporationhasanagreementwiththeCrowninrightoftheStateofTasmaniatoprovidecommunityservicesintheformofaconcessionandfortheCorporationtobereimbursedforthecommunityservicescostsandadministrationcosts.Anysuchreimbursementsarerecordedassalesrevenueonanaccrualbasis.
Grants
GrantsarerecognisedwhenreceivedorwhentheCorporationobtainscontrolovertheassetscomprisingthecontributions.Governmentgrantsofarevenuenaturearerecognisedasincomeovertheperiodsnecessarytomatchrelatedcosts.GovernmentgrantsrelatedtoassetsarerecognisedintheStatementofFinancialPositionasadeferredliabilityandarerecognisedasrevenueonasystematicbasisovertheusefullifeoftheasset.
Customer Contributions and Developer Charges
Customercontributionsanddeveloperchargesreceivedfornoconsiderationarerecognisedatfairvalueandtreatedasrevenuewhenreceivedunlesstheyaredirectlyassociatedwithanincompletecapitalproject,inwhichcasetheyareincludedasaliabilityandcapitalworkinprogressinthestatementoffinancialpositionandrecognisedwhentheprojectiscompleted.
3.5 Goods and Services Tax
Revenues,expensesandassetsarerecognisednetoftheamountofgoodsandservicestax(GST),except:
i. wheretheamountofGSTincurredisnotrecoverablefromthetaxationauthority,itisrecognisedaspartofthecostofacquisitionofanassetoraspartofanitemofexpense;or
ii. forreceivablesandpayableswhicharerecognisedinclusiveofGST.
ThenetamountofGSTrecoverablefrom,orpayableto,thetaxationauthorityisincludedaspartofreceivablesorpayables.
Cashflowsareincludedinthestatementofcashflowsonagrossbasis.TheGSTcomponentofcashflowsarisingfrominvestingandfinancingactivitieswhichisrecoverablefrom,orpayableto,thetaxationauthorityisclassifiedwithinoperatingcashflows.
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Notes to the Financial Statements FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012
Tasmanian Water and Sewerage Corporation (North-Western Region) Pty Ltd
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3.6 Taxation
Incometaxequivalentsexpenseontheprofitfortheyearcomprisescurrentanddeferredtax.IncometaxisrecognisedintheStatementofComprehensiveIncomeexcepttotheextentthatitrelatestoitemsrecogniseddirectlyinequity,inwhichcaseitisrecognisedinequity.
Currenttaxistheexpectedtaxpayableonthetaxableincomefortheyear,usingtaxratesenactedorsubstantiallyenactedatthebalancedate,andanyadjustmenttotaxpayableinrespectofpreviousyears.
IncometaxequivalentpaymentsaredistributedtoownercouncilsinaccordancewiththeTreasurer’sAllocationOrder.
Deferredtaxisprovidedusingthebalancesheetliabilitymethodandrepresentsthetemporarydifferencesarisingbetweenthetaxbaseofassetsandliabilitiesandtheircarryingamountsinthefinancialreport.Deferredtaxassetsrelatingtodeductibletemporarydifferencesandtaxlossesareonlybroughttoaccountwhentheirrealisationisprobable(ReferNote6).
3.7 Cash and Cash Equivalents
Cashandcashequivalentsincludescashonhandandinbanksandinvestmentsinmoneymarketinstrumentswhicharereadilyconvertibletocashonhandandwhichareusedinthecashmanagementfunctiononaday-to-daybasis.Cashassetsarebroughttoaccountatamortisedcost.
3.8 Inventories
Inventoriescomprisestoresandmaterialsusedintheconstructionofnewworksandfortherepairandmaintenanceofexistingassets.Allinventoriesarevaluedatthelowerofcostornetrealisablevalue.Costsareassignedtoinventoryquantitiesonhandatbalancedateonaweightedaveragecost(WAC)basis.
3.9 Receivables
Tradereceivablesarerecognisedattheiramortisedcostlessanallowanceforimpairmentlosses.Theallowanceforimpairedreceivablesiscalculatedasapercentageofoverduereceivablesbalanceatyearendaftertakingintoaccountspecificcustomersegmentswithreferencetopastdefaultexperience.Theactualpercentageapplieddependsontheageofthedebt.Debtsarewrittenoffwhencollectionisnolongerprobable.Tradereceivablescompriseresidential,commercial,industrialandirrigationcustomersandothersundrydebtors.Settlementtermsforcustomersrangefrom14to31daysfrominvoicedate.ReceivablesincludeunbilledwaterandsewerageincomeasdetailedinNote3.4.
3.10 Property, Plant and Equipment
(a)ConstructionofProperty,PlantandEquipment
Thecostofproperty,plantandequipmentconstructedbytheCorporationincludesthecostofallmaterialsusedinconstructionandthecostofdirectlabourontheproject.Internallabourandotherrelatedcostsmayalsoformpartoftheprojectcost.
(b)AcquisitionofProperty,PlantandEquipment
Property,plantandequipmentareinitiallyrecordedatthecostofacquisition.Costisdeterminedasthepurchasevalueoftheassetatthedateofacquisitionpluscostsincidentaltotheacquisition.Developercontributionsreceivedfornoconsiderationarerecordedatfairvalue.
(c)ValuationsandRecoverableAmountsofProperty,PlantandEquipment
InfrastructureAssets,FreeholdLandandBuildingsarecarriedatfairvalue.Attheendofeachreportingperiod,theCorporationreviewsthecarryingamountsoftheassetsheldwithintheassetclass(ReferNote3.14).
OtherAssetsarestatedatcostlessaccumulateddepreciationandaccumulatedimpairmentadjustments.OtherAssetsincludemotorvehicles,furniture,fittings,telemetryequipmentandIThardware.
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Notes to the Financial Statements FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012
Tasmanian Water and Sewerage Corporation (North-Western Region) Pty Ltd
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(d)Depreciation
Depreciationofproperty,plantandequipment(otherthanland)iscalculatedonanindividuallyassessedeconomiclifeusingthestraight-linemethodofdepreciation,soastowriteoffthenetcost(orpreviouslyrevaluedamounts)ofeachassetoveritsexpectedusefullife.Theeconomiclifeofproperty,plantandequipmentisreviewedattheendofeachreportingperiod,withtheeffectofanychangesinestimateaccountedforonaprospectivebasis.
Theassessedeconomiclifeofproperty,plantandequipmentissummarisedasfollows:
Dams/Earthworks: 135years
Pipelines: 30–140years
Civil/Structural: 30–100years
OtherInfrastructure: 5–40years
Buildings: 50–85years
LeaseholdImprovements: 2–10years
OtherAssets: 2–25years
(e) SubsequentCosts
TheCorporationrecognisesinthecarryingamountofanitemofproperty,plantandequipmentthecostofreplacingpartofsuchanitemwhenthatcostisincurredifitisprobablethatthefutureeconomicbenefitsembodiedwithintheitemwillflowtotheCorporationandthecostoftheitemcanbemeasuredreliably.AllothercostsarerecognisedintheStatementofComprehensiveIncomeasanexpenseasincurred.
3.11 Leased Property, Plant and Equipment
Leasesofproperty,plantandequipmentareclassifiedasoperatingleaseswherethelessorretainssubstantiallyalloftherisksandbenefitsofownership.Leasepaymentsarechargedagainstprofitsinequalinstalmentsovertheaccountingperiodscoveredbytheleaseterms,exceptwhereanalternativebasiswouldbemorerepresentativeofthepatternsofbenefitstobederivedfromtheleasedproperty.
3.12 Intangible Assets
Intangibleassetscomprisecostsassociatedwiththepurchaseanddevelopmentofcomputersoftware.Intangibleassetsareinitiallyrecordedattheircostofacquisition.Costisdeterminedasthepurchasevalueoftheassetatthedateofacquisitionpluscostsincidentaltotheacquisition,includingdirectlabourcosts.
Amortisationofintangibleassetsiscalculatedonanindividuallyassessedeconomiclifeusingthestraight-linemethodofamortisation,soastowriteoffthenetcost(orpreviouslyrevaluedamounts)ofeachassetoveritsexpectedusefullife.Theestimatedusefullifeofcomputersoftwareisbetweentwoandtenyears.
a) Acquiredseparately
Separatelyacquiredintangibleassetscomprisecostsassociatedwiththepurchaseanddevelopmentofcomputersoftware.Intangibleassetsareinitiallyrecordedattheircostofacquisition.Costisdeterminedasthepurchasevalueoftheassetatthedateofacquisitionpluscostsincidentaltotheacquisition,includingdirectlabourcosts.
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b) Internally-generated
Internally-generatedintangibleassetscomprisedevelopmentcostsassociatedwiththedevelopmentofspecificbusinessmanagementsystems.Aninternally-generatedintangibleassetarisingfromdevelopment(orfromthedevelopmentphaseofaninternalproject)isrecognisedif,andonlyif,allofthefollowinghavebeendemonstrated:
•thetechnicalfeasibilityofcompletingtheintangibleassetsothatitwillbeavailableforuseorsale;
•theintentiontocompletetheintangibleassetanduseorsellit;
•theabilitytouseorselltheintangibleasset;
•howtheintangibleassetwillgenerateprobablefutureeconomicbenefits;
•theavailabilityofadequatetechnical,financialandotherresourcestocompletethedevelopmentandtouseorselltheintangibleasset;and
•theabilitytomeasurereliablytheexpenditureattributabletotheintangibleassetduringitsdevelopment.
Theamountinitiallyrecognisedforinternally-generatedintangibleassetsisthesumoftheexpenditureincurredfromthedatewhentheintangibleassetfirstmeetstherecognitioncriterialistedabove.Wherenointernally-generatedintangibleassetcanberecognised,developmentexpenditureisrecognisedinStatementofComprehensiveIncomeintheperiodinwhichitisincurred.
3.13 Investment in Associate
InvestmentsinassociatesareaccountedforusingtheequitymethodinaccordancewithAASB128andareinitiallyrecognisedatcost.
TheCorporation’sshareofprofitsandlossesofanassociateisrecognisedinitsStatementofComprehensiveIncome,withanequivalentadjustmenttothecarryingvalueoftheinvestment.TheCorporation’sshareofmovementsinanassociate’sequitythathasnotbeenrecognisedintheassociate’sStatementofComprehensiveIncomeisrecogniseddirectlyinequity.
3.14 Impairment
TheCorporation’sassetsincludingitsdeferredtaxassetsarereviewedateachbalancedatetodeterminewhetherthereisanyindicationofimpairment.Ifanysuchindicationexiststheasset’srecoverableamountisestimated.
Animpairmentlossisrecognisedwheneverthecarryingamountofanassetoritscashgeneratingunitexceedsitsrecoverableamount.ImpairmentlossesarerecognisedintheStatementofComprehensiveIncome,unlessanassethaspreviouslybeenrevalued,inwhichcasetheimpairmentlossisrecognisedasareversaltotheextentofthatpreviousrevaluationwithanyexcessrecognisedthroughtheStatementofComprehensiveIncome.
(a)Calculationofrecoverableamount
Impairmentofreceivablesisnotrecogniseduntilobjectiveevidenceisavailablethatalosseventhasoccurred.Receivablesareindividuallyassessedforimpairmentbasedonobjectiveevidencefromhistoricalexperienceadjustedforconditionsexistingateachbalancedate.
InundertakingtheimpairmenttestingofitsinfrastructureassetsithasbeendeterminedthattheCorporation’sassetsoperateastwocash-generatingunits;waterandsewerage.Therecoverableamountoftheseassetsisthegreateroftheirfairvaluelesscoststosellandvalueinuse.Inassessingvalueinuse,theestimatedfuturecashflowsarediscountedtotheirpresentvalueusingapre-taxdiscountratethatreflectscurrentmarketassessmentsofthetimevalueofmoneyandtherisksspecifictotheassets.
Notes to the Financial Statements FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012
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(b)ReversalsofImpairment
Impairmentlossesarereversedwhenthereisanindicationthattheimpairmentlossmaynolongerexistandtherehasbeenachangeintheestimateusedtodeterminetherecoverableamount.Animpairmentlossisreversedonlytotheextentthattheasset’scarryingamountdoesnotexceedthecarryingamountthatwouldhavebeendetermined,netofdepreciationoramortisation,ifnoimpairmentlosshadbeenrecognised.
3.15 Employee Entitlements
(a)Wages,Salaries,AnnualLeave,RosteredDaysOffandTimeOffinLieu
Aliabilityisrecognisedforbenefitsaccruingtoemployeesinrespectofwagesandsalaries,annualleave,rostereddaysoffandtimeoffinlieuwhenitisprobablethatsettlementwillberequiredandtheyarecapableofbeingmeasuredreliably.
Liabilitiesrecognisedinrespectofemployeebenefitsthatareexpectedtobesettledwithin12monthsofthereportingdate,aremeasuredattheirnominalvaluesusingtheremunerationrateexpectedtoapplyatthetimeofsettlement.
Liabilitiesrecognisedinrespectofemployeebenefitsthatarenotexpectedtobesettledwithin12monthsofthereportingdatearemeasuredatthepresentvalueoftheestimatedfuturecashoutflowstobemadebytheCorporationinrespectoftheservicesprovidedatreportingdate.
Regardlessoftheexpectedtimingofsettlements,liabilitiesinrespectofemployeebenefitsareclassifiedasacurrentliability,unlessthereisanunconditionalrighttodeferthesettlementoftheliabilityforatleast12monthsafterthereportingdate,inwhichcaseitwouldbeclassifiedasanoncurrentliability.
(b)LongServiceLeave(LSL)
CurrentLiability-unconditionalLSL(representing10ormoreyearsofcontinuousservice)isdisclosedasacurrentliabilityevenwheretheCorporationdoesnotexpecttosettletheliabilitywithin12monthsbecauseitdoesnothavetheunconditionalrighttodeferthesettlementoftheentitlementshouldanemployeetakeleavewithin12months.
ThecomponentsofthiscurrentLSLliabilityaremeasuredat:
•Presentvalue-componentthattheCorporationdoesnotexpecttosettlewithin12months;and
•Nominalvalue-componentthattheCorporationexpectstosettlewithin12months.
Non-currentLiability-conditionalLSL(representinglessthantenyearsofcontinuousservice)isdisclosedasanon-currentliability.Thereisanunconditionalrighttodeferthesettlementoftheentitlementuntiltheemployeehascompletedtherequisiteyearsofservice.ConditionalLSLisrequiredtobemeasuredatpresentvalue.
Incalculatingpresentvalue,considerationisgiventoexpectedfuturewageandsalarylevels,experienceofemployeedeparturesandperiodsofservice.Thepresentvaluecalculationalsotakesaccountofemployeeswithsevenyearsofcontinuousserviceastheyareentitledtoapro-rataallowanceequivalenttotheirLSLentitlementupontermination–someotherconditionsalsoapply.Expectedfuturepaymentsarediscountedusingmarketyieldsatthereportingdateonnationalgovernmentbondswithtermstomaturityandcurrencythatmatch,ascloselyaspossible,theestimatedfuturecashoutflows.
AliabilityforLSLisrecognisedandismeasuredonthebasisofthepresentvalueoftheexpectedfuturecashoutflowsatbalancedate,includingsuperannuation.Themarketyieldsongovernmentbondsareusedtodeterminethepresentvalueofthefuturecashflows.Theclassificationoftheliabilityforlongserviceleaveisonthebasisthatentitlementsinrespectofservicegreaterthantenyearsareshownasacurrentliability.
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(c)Superannuation
ProvisionismadefortheCorporation’sfutureliabilityforemployees’superannuationentitlementsundertheRetirementBenefitsFundScheme,thePublicServantsRetiringandDeathAllowancesSchemeandtheprovisionisfullyprovidedforbytheCorporation(referNote13).TheCorporationalsomakessuperannuationcontributionstotheQuadrantDefinedBenefitsScheme(forformeremployeesoftheBurnieCityCouncil,CentralCoastCouncil,DevonportCityCouncil,LatrobeCouncilandWestCoastCouncil).
TheprovisioninrelationtotheRetirementBenefitsFundSchemeisbasedonanactuarialvaluationconductedbyMercer(Australia)PtyLtd.TheCorporationisnotrequiredtoholdaprovisioninrelationtotheQuadrantDefinedBenefitsScheme,theactuarialvaluationisconductedbyBendzullaActuarialPtyLtd.
TheCorporation,onanemergingcostbasis,paysitsportionofthefutureservicecomponentofdeathanddisablementbenefitsundertheRetirementBenefitsFundScheme.
InaccordancewithaccountingstandardAASB119EmployeeBenefits,theCorporationhaselectedtorecogniseactuarialgainsandlossesondefinedbenefitplansdirectlythroughretainedearnings.
TheCorporationalsomakessuperannuationcontributionsforanumberofitsemployeestoanotherQuadrantDefinedBenefitsFund,whichisasubfundoftheQuadrantSuperannuationScheme.ThisFundisclassifiedasamulti-employersponsoredplan.AstheFund’sassetsandliabilitiesarepooledandarenotallocatedbyemployer,theActuary,BendzullaActuarialPtyLtd,isunabletoallocatebenefitliabilities,assetsandcostsbetweenemployees.Asprovidedunderparagraph32(b)ofAASB119,theCorporationdoesnotusedefinedbenefitaccountingforthesecontributions.
TheCorporationalsocontributesatleasttheminimumlevelofsupportrequiredbytheCommonwealthSuperannuationGuarantee(Administration)Act1992,toanumberofcomplyingaccumulatedbenefitssuperannuationfunds.Contributionsareexpensedastheyaremade.
3.16 Borrowings
Allborrowingsarerecognisedinitiallyatfairvaluelessattributabletransactioncosts.Subsequenttoinitialrecognition,interestbearingborrowingsaremeasuredatamortisedcostusingtheeffectiveinterestmethod.
3.17 Borrowing Costs
Borrowingcostsdirectlyattributabletotheacquisition,constructionorproductionofqualifyingassets,whichareassetsthatnecessarilytakeasubstantialperiodoftimetogetreadyfortheirintendeduseorsale,areaddedtothecostofthoseassets,untilsuchtimeastheassetsaresubstantiallyreadyfortheirintendeduseorsale.
IncludedinBorrowingCostsistheGovernmentGuaranteeFee(GGF)whichisadministeredbytheDepartmentofTreasuryandFinance.ThepurposeoftheGGFistoneutralisethecompetitiveadvantageoftheCorporationhavingaccesstofundingthroughtheTasmanianPublicFinanceCorporation(Tascorp).TheGGFispayabletoownercouncils.
AllotherborrowingcostsarerecognisedintheStatementofComprehensiveIncomeintheperiodinwhichtheyareincurred.
3.18 Payables
TradepayablesarerecognisedatamortisedcostwhentheCorporationbecomesobligedtomakefuturepaymentsresultingfromthepurchaseofgoodsandservices.Tradepayablesareunsecuredandareusuallysettledwith30daysofrecognition.
Notes to the Financial Statements FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012
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3.19 Provisions
TheCorporationassessesonanannualbasiswhetherthereisanobligationtoestablishaprovisionforsiterehabilitationtakingintoaccountplantorotheractivitywhichhasbeendecommissionedduringtheyearandplanstodecommissioninfutureyears.Theamounttobeprovisionedwillincludethecostofnecessaryworkstorehabilitatethesitetoconditionsnominatedinstatuteorgovernmentregulationsortosatisfycommunityorotherexpectations.Whenappropriatethefuturerehabilitationcostsmaybediscountedbyapresentvaluetechnique.
3.20 Dividends Payable
DividendspayablearerecognisedwhenapprovedbytheBoardoftheCorporation(ReferNote7).Inaccordancewithaccountingstandardsfinaldividendsarenotrecognisedinthefinancialstatementsunlesstheyaredeclaredpriortothebalancedate.
3.21 Financial Instruments
FinancialassetsandfinancialliabilitiesarerecognisedwhentheCorporationbecomesapartytothecontractualprovisionsoftheinstrument.Financialassetsandfinancialliabilitiesareinitiallymeasuredatfairvalue.
3.21.1 Financial Assets
Financialassetsareclassifiedintothefollowingspecifiedcategories:financialassets‘atfairvaluethroughtheStatementofComprehensiveIncome’,‘held-to-maturity’investments,‘available-for-sale’financialassetsand‘loansandreceivables’.TheCorporationdoesnotcurrentlyhold,norisitlikelytohold,anyfinancialassetsclassified‘atfairvaluethroughtheStatementofComprehensiveIncome’,‘heldtomaturity’investments,or‘availableforsale’.Theclassificationdependsonthenatureandpurposeofthefinancialassetsandisdeterminedatthetimeofinitialrecognition.
Effective Interest Method
Theeffectiveinterestmethodisamethodofcalculatingtheamortisedcostofadebtinstrumentandofallocatinginterestincomeovertherelevantperiod.Theeffectiveinterestrateistheratethatexactlydiscountsestimatedfuturecashreceiptsthroughtheexpectedlifeofthedebtinstrument,or(whereappropriate)ashorterperiod,tothenetcarryingamountoninitialrecognition.
Loans and receivables
Tradereceivables,loans,andotherreceivablesthathavefixedordeterminablepaymentsthatarenotquotedinanactivemarketareclassifiedas‘loansandreceivables’.Loansandreceivablesaremeasuredatamortisedcostusingtheeffectiveinterestmethod,lessanyimpairment.Interestincomeisrecognisedbyapplyingtheeffectiveinterestrate,exceptforshort-termreceivableswhentherecognitionofinterestwouldbeimmaterial.Loansandreceivablesexcludestatutoryreceivables.
Impairment of Financial Assets
Financialassetsareassessedforindicatorsofimpairmentattheendofeachreportingperiod.Financialassetsareconsideredtobeimpairedwhenthereisobjectiveevidencethat,asaresultofoneormoreeventsthatoccurredaftertheinitialrecognitionofthefinancialasset,theestimatedfuturecashflowsoftheinvestmenthavebeenaffected.ImpairmentlossesarerecognisedintheStatementofComprehensiveIncome.
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3.21.2 Financial Liabilities
Financialliabilitiesareclassifiedaseitherfinancialliabilities‘atFairValuethroughtheStatementofComprehensiveIncome’or‘otherfinancialliabilities’.CurrentlytheCorporationdoesnot,norisitlikelyto,holdfinancialliabilitiesclassifiedatfairvaluethroughtheStatementofComprehensiveIncome.
Other Financial Liabilities
Otherfinancialliabilities,includingborrowings,areinitiallymeasuredatfairvalue,netoftransactioncosts.
Otherfinancialliabilitiesaresubsequentlymeasuredatamortisedcostusingtheeffectiveinterestmethod,withinterestexpenserecognisedonaneffectiveyieldbasis.
Theeffectiveinterestmethodisamethodofcalculatingtheamortisedcostofafinancialliabilityandofallocatinginterestexpenseovertherelevantperiod.Theeffectiveinterestrateistheratethatexactlydiscountsestimatedfuturecashpaymentsthroughtheexpectedlifeofthefinancialliability,or(whereappropriate)ashorterperiod,tothenetcarryingamountoninitialrecognition.
3.22 Comparisons with Previous Year
Wherenecessary,comparativefiguresareadjustedtoconformwithchangesinpresentationinthecurrentyear.
Notes to the Financial Statements FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012
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Notes to the Financial Statements FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012
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preparingforthefuture
2012 $’000
2011$’000
4 Revenue
Sales Revenue:
Water-ServiceCharge 19,084 16,662
Sewerage-ServiceCharge 20,159 18,038
Water-UsageCharges 4,725 4,606
Sewerage-UsageCharge 3,703 3,647
IrrigationIncome 118 69
StateGovernmentFundedCompensation(Note3.4) 1,693 2,442
StateGovernmentFundedConcessions 1,685 1,442
OtherFeesandCharges 874 1,283
Total Sales 52,041 48,189
Other Income from Operating Activities:
ContributedAssetsandHeadworkCharges 1,234 1,092
GovernmentGrants 166 328
ProfitonDisposalofPropertyPlantandEquipment 22 84
RecoveryMisappropriatedFunds(Note3.22) - 1,035
Other 536 478
PriorPeriodCreditAdjustment (733) -
Total Other Income from Operating Activities 1,225 3,017
Financial Income:
InterestEarned-DepositsandInvestments 81 69
Total Financial Income 81 69
Total Revenue 53,347 51,275
5 ExpensesRaw Material and Consumables:
PowerCosts 3,055 2,740
WaterCommissionRights 464 393
Chemicals 1,409 1,257
Total 4,928 4,390
Depreciation and Amortisation Expenses:
InfrastructureAssets 11,424 11,538
Software 236 20
Buildings 49 46
OtherAssets 989 820
Total 12,698 12,424
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Notes to the Financial Statements FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012
Tasmanian Water and Sewerage Corporation (North-Western Region) Pty Ltd
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2012 $’000
2011$’000
5 ExpensescontinuedFinancing Expenses:
InterestExpense-Borrowings 5,833 5,188
LessAmountCapitalised(1) (474) (480)
InterestExpense-Superannuation 57 77
GovernmentGuaranteeFeeExpense(Paidtoownercouncils) 869 780
Lossesincurredonrestructureofportfolio 6 3
Total 6,291 5,568(1)Averagecapitalisationrateis5.26%p.a.(2011:5.15%)
Employee and Related Expenses:
SalariesandOn-Costs 14,204 12,896
LessCapitalisedSalaries (2,470) (2,595)
EntitlementAllowance 1,449 1,508
TrainingandTravel 298 243
Other 301 356
Total 13,782 12,408
Operations and Maintenance Expenses:
MaintenanceandPlanning 4,723 3,847
WaterSampling 1,143 808
Propertycosts 511 246
MotorVehicles 903 762
SupportingOperatingSystemsandEquipment 209 178
LessCapitalisedExpenses (563) -
Total 6,926 5,841
Administration Expenses:
Insurance 382 330
ServicesprovidedbyAssociate 3,345 3,469
Rates,LandTaxandPropertyCosts 626 816
Consultancies 509 792
Leases 264 334
InformationSystemsandCommunications 703 594
MisappropriationofFunds 15 26
AllowancesforImpairedReceivablesandBadDebts 632 346
CorporateGovernance 729 672
Billingincludingpostage,printingandagencyfees 286 21
OtherAdministration 591 510
Total 8,082 7,910
Total Expenses 52,707 48,541
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Notes to the Financial Statements FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012
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preparingforthefuture
2012 $’000
2011$’000
6 IncomeTaxEquivalents6.1 Income tax equivalents recognised in
Statement of Comprehensive Income
Incometaxexpense(benefit)comprises
Current tax
Currenttaxexpense/(income)inrespectofcurrentyear 850 1,055
Adjustmentsrecognisedinthecurrentyearinrelationtothecurrenttaxofprioryears - (4)
Total 850 1,051
Deferred Tax
Deferredtaxexpense/(income)recognisedincurrentyear (655) (148)
Totalincometaxrecognisedinthecurrentyearrelatingtocontinuingoperations 195 903
Theprimafacieincometaxequivalentsonpre-taxaccountingprofitfromoperationsreconcilestotheincometaxequivalentsinthefinancialstatementsasfollows:
Profitfromcontinuingoperations 654 2,777
Profitfromoperations 654 2,777
Incometaxequivalentscalculatedat30% 196 833
Effectofexpensesthatarenon-deductibleindeterminingtaxableprofit (1) -
Other - 70
195 903
Adjustmentsincurrentyearinrelationtothecurrenttaxofprioryears (3) -
Income tax equivalents expense (benefits) 192 903
Thetaxequivalentrateusedinthereconciliationsaboveisthenationaltaxequivalentratepayableof30%payablebyAustraliannationaltaxequivalententitiesonprofitsunderAustraliantaxlaw.
6.2 Deferred tax equivalents recognised directly in equity
Thefollowingcurrentanddeferredtaxequivalentswerechargeddirectlytoequityduringtheperiod:
Actuarialgain(loss)ondefinedbenefitplan 26 (57)
Total 26 (57)
6.3 Current tax equivalent liabilities
Openingbalance (836) (1,059)
Nationaltaxequivalentpayable-Currentyear (850) (1,055)
Instalmentspaid 1,647 1,278
Total (39) (836)
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Notes to the Financial Statements FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012
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2012 $’000
2011$’000
6 IncomeTaxEquivalentscontinued6.4 Deferred tax equivalent assets and (liabilities)
Deferredtaxequivalentassetscomprise:
Taxlosses-revenue 2,680 2,822
Temporarydifferences 2,786 2,076
Total 5,466 4,898
Deferredtaxequivalent(liabilities)comprise:
Temporarydifferences (6,812) (6,928)
Net deferred tax equivalent assets (liabilities): (1,346) (2,030)
Taxableanddeductibledifferencesarisefromthefollowing:
30 June 2012
Opening balance $’000
Charged to Income $’000
Charged to Equity $’000
Other Acquisitions / Disposals
$’000
Closing balance $’000
Deferred tax equivalent assets:
Provisions 1,372 152 26 - 1,550
Taxlosses 2,822 (175) - 33 2,680
Other 704 532 - - 1,236
Total 4,898 509 26 33 5,466
Deferred tax equivalent liabilities:
Property,plantandequipment (6,928) 146 - (30) (6,812)
Other - - - - -
Total (6,928) 146 - (30) (6,812)
Net deferred tax equivalent liabilities: (2,030) 655 26 3 (1,346)
Attributable to:
Continuingoperations (2,030) (1,346)
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Notes to the Financial Statements FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012
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6 IncomeTaxEquivalentscontinued
30 June 2011
Opening balance $’000
Charged to Income $’000
Charged to Equity $’000
Other Acquisitions / Disposals
$’000
Closing balance $’000
Deferred tax equivalent assets:
Provisions 1,253 176 (57) - 1,372
Taxlosses 3,073 (251) - - 2,822
Other 706 (2) - - 704
Total 5,032 (77) (57) - 4,898
Deferred tax equivalent liabilities:
Property,plantandequipment (7,152) 224 - - (6,928)
Other (5) 5 - - -
Total (7,157) 229 - - (6,928)
Net deferred tax equivalent liabilities: (2,125) 152 (57) - (2,030)
Attributable to:
Continuingoperations (2,125) (2,030)
Grosscumulativetaxequivalentlossesof$8,934,706(2011:$9,406,571)(Taxeffect,2012:$2,680,412,2011:$2,821,971)werebroughttoaccountasadeferredtaxasset.IncludedinthecumulativetaxlossesarelossestransferredfromCradleCoastWaterattheinceptionoftheCorporation.Theutilisationoftransferredlossesislimitedbythe‘availablefraction’method.TheCorporation’scarryforwardlossesareclassifiedasanassetonthebasisofcertaintyofrecoupingthelossatsometimeinthefuture.
Thisbenefitfortaxequivalentlosseswillonlybeobtainedif:
(a)TheCorporationderivesfutureassessabletaxequivalentincomeofanatureandamountsufficienttoenablethebenefitfromthedeductionforthetaxequivalentlossestoberealised;
(b)TheCorporationcontinuestocomplywiththeconditionsofdeductibilityimposedbylegislation;and
(c)NochangesinlegislationthatadverselyaffecttheCorporationinrealisingthebenefitfromthedeductionforthetaxequivalentlosses.
AvailabilityoftaxlossesissubjecttotheCorporationcontinuinginitscurrentstructure.ConsiderationiscurrentlybeinggiventoamergeroftheTasmanianwaterandsewerageCorporations,includingtheirsharedservicesprovider.Theavailabilityofthelossestoamergedorganisationwouldbesubjecttotransitionalprovisionsandtheapplicationofthelossrecognitionprovisions.
7 DividendsProvidedFororPaid
TheDirectorsdidnotrecommendaninterimdividendduringthe2011-12financialyear(Interimdividend2010-11:$Nil).
AtthedateofthisreporttheBoardhasnotrecommendedthepaymentofafinaldividendfor2011-12(2010-11:$Nil).Inaccordancewithaccountingstandardsfinaldividendsarenotrecognisedinthefinancialstatementsunlesstheyaredeclaredpriortothebalancedate.
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Notes to the Financial Statements FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012
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2012 $’000
2011$’000
8 CurrentAssets
8.1 Cash and Cash Equivalents
CashatBankandonHand 2,327 2,670
CashManagementAccountwithTascorp - 6
Total 2,327 2,676
8.2 Receivables
Tradereceivables 13,474 10,763
Lessallowanceforimpairedtradereceivables (734) (444)
Unbilledwaterandsewerageincome 437 1,389
NetGSTreceivable 649 258
Othercurrentreceivables 1,140 852
Total 14,966 12,818
AnageinganalysisofreceivablesisprovidedinNote20.3(CreditRiskManagement).
Movementinallowanceforimpairedtradereceivables.
Openingbalance 444 100
Increase(decrease)inallowance 632 346
Amountsrecoveredduringtheyear - -
Amountswrittenoffduringtheyear (342) (2)
ClosingBalance 734 444
Anallowancehasbeenmadeforestimatedunrecoverableamountswhenthereisobjectiveevidencethatanindividualreceivableisimpaired.Theincreaseintheallowancewasrecognisedinthenetresultforthecurrentyear.
8.3 Inventories (at cost)
Storesandconsumablesatcost 955 849
Total 955 849
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Notes to the Financial Statements FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012
Tasmanian Water and Sewerage Corporation (North-Western Region) Pty Ltd
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9 Property,PlantandEquipment
FairvalueofassetscontributedbythenineownercouncilsandCradleCoastWaterwasdeterminedbyanindependentvaluationbasedondepreciatedreplacementcostasat1July2009,additionsarerecognisedatcost.Recoverableamountwaslowerthandepreciatedreplacementcostandthisamountwasusedfortheinitialrecognitionoftheassetvalues.Noimpairmentlosswasrecordedasthiswastheinitialrecognitionofassetvalues.Subsequenttodeterminingtheirfairvalue,theassetswerethentestedforimpairmentbyapplyingacash-generatingunittesttodeterminetheirrecoverableamount,whichrepresentstheirvalueinuse.Thecash-generatingunittestcalculatesthediscountedpresentvalueofthenetcashinflowsthattheCorporationexpectstobegeneratedfromitsassets,operatinggeneratingtogetherwithinseparatelyidentifiedcash-generatingunits,overtheirexpectedusefullives.TwocashgeneratingunitswereidentifiedfortheCorporation,waterandsewerage.Theimpairmenttesthasalsobeenperformedforthecurrentreportingperiod,whichresultedinnoimpairmentat30June2012.Thetestishighlydependentontheassumptionsusedtoestimatethefuturenetcashflowsthatarederivedfromtherelevantassets.Thereforethiscalculationcontainsanelementofsubjectivityanduncertaintyinrelationtotheseassumptions.
Themainassumptionswere:
Item Assumption
DiscountRate Realpre-taxweightedaveragecostofcapitalof7.27%pa(2011:7.27%)basedonindependentreview.
TheRiskFreeRateisakeyinputintothedeterminationoftheWeightedAverageCostofCapital.A20dayaverageofthe10yearAustralianCommonwealthbondratewasusedastheriskfreerateintheprioryearcalculation.Inthecurrentyearthishasbeenextendedtoa10yearaverageofthe10yearAustralianCommonwealthbondrate.Thisisconsideredtobemorereflectiveofthelong-lifenatureoftheCorporation’sassets.
CPIRate 2.75%pa(2011:2.5%)
Periodofdiscounting 7yearswithaterminalvalue,basedonaperpetualfactorof14.53(2011:14.53)appliedforsubsequentyears.
Cashinflows BasedonthemostrecentrevenueforecastandCorporatePlanestimates,incorporatinganominalpriceincreaseof6.6%asperthePriceandServicePlan.AfterallowingforCPI,therealpriceincreaseis4.1%pa(2011:4.1%).
Cashoutflows BasedonmostrecentexpenditureforecastandCorporatePlan,incorporatingnominalaveragecostincreaseof3.1%pa(2011:2.5%)andlabourincreaseof4%pa(2011:4.0%).AfterallowingforCPItherealcostincreaseis0.6%(2011:nil)andreallabourincreaseof1.5%pa(2011:1.5%)isassumed.
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Notes to the Financial Statements FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012
Tasmanian Water and Sewerage Corporation (North-Western Region) Pty Ltd
F I N A N C I A L R E P O R T 2 0 1 1 - 2 0 1 2
53
2012 $’000
2011$’000
9 Property,PlantandEquipmentcontinued
Infrastructure Assets - Water
AtFairValue 224,523 217,735
AccumulatedDepreciation (17,450) (11,715)
Total 207,073 206,020
Infrastructure Assets - Sewerage
AtFairValue 181,942 173,418
AccumulatedDepreciation (16,845) (11,230)
Total 165,097 162,188
Freehold Land
AtFairValue 12,053 12,053
Buildings
AtFairValue 2,587 2,587
AccumulatedDepreciation (143) (92)
Total 2,444 2,495
Other Assets
AtCost 7,865 6,675
AccumulatedDepreciation (2,205) (1,455)
Total 5,660 5,220
Work In Progress
AtCost 26,563 17,340
Total 418,890 405,316
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Notes to the Financial Statements FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012
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9. Property,PlantandEquipmentcontinued
Property, Plant and Equipment Reconciliation
Asset Group ($’000)
Infrastructure Assets Water at Fair Value
Infrastructure Assets
Sewerage at Fair Value
Freehold Land
at Fair Value
Buildings at Fair Value
Other Assets at Cost
Work In Progress at Cost
Total
OpeningNetBookValue 206,020 162,188 12,053 2,495 5,220 17,340 405,316
Reclassification - - - (2) 2 - -
ContributedAssetsatFairValue 348 609 - - - - 957
AdditionsatCost 4 - - - - 25,387 25,391
TransfersfromWorkinProgress 6,510 7,915 - - 1,739 (16,164) -
Disposals - - - - (312) - (312)
DepreciationExpenses (5,809) (5,615) - (49) (989) - (12,462)
Net Book Value as at 30 June 2012 207,073 165,097 12,053 2,444 5,660 26,563 418,890
OpeningNetBookValue 219,270 151,002 12,015 1,540 4,664 12,169 400,660
Reclassification (13,520) 13,350 - 479 (309) - -
ContributedAssetsatFairValue 197 538 - - - - 735
AdditionsatCost - - - - 648 15,687 16,335
TransfersfromWorkinProgress 5,801 2,970 38 522 1,185 (10,516) -
Disposals 138 - - - (148) - (10)
DepreciationExpenses (5,866) (5,672) - (46) (820) - (12,404)
Net Book Value as at 30 June 2011 206,020 162,188 12,053 2,495 5,220 17,340 405,316
Iftheproperty,plantandequipmentweremeasuredatdepreciatedreplacementcostthecarryingamountsat30June2012wouldbeasfollows.Depreciatedreplacementcostofwaterandsewerageassetswasdeterminedat1July2009byanindependentvaluationundertakenbyGHDandSerck.Otherassetsarerecordedatwrittendownreplacementcostasdeterminedbyowners.
Asset Group ($’000)
Infrastructure Assets Water
Infrastructure Assets
Sewerage
Freehold Land Buildings Other Assets Work In Progress
Total
Depreciatedreplacementcost 303,042 386,462 12,054 2,681 7,984 26,446 738,669
Accumulateddepreciation (23,746) (36,512) - (147) (2,390) - (62,795)
Net Carrying Amount as at 30 June 2012 279,296 349,950 12,054 2,534 5,594 26,446 675,874
Depreciatedreplacementcost 295,102 378,038 12,054 2,587 6,676 17,340 711,797
Accumulateddepreciation (14,725) (24,687) - (95) (1,447) - (40,954)
Net Carrying Amount as at 30 June 2011 280,377 353,351 12,054 2,492 5,229 17,340 670,843
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Notes to the Financial Statements FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012
Tasmanian Water and Sewerage Corporation (North-Western Region) Pty Ltd
F I N A N C I A L R E P O R T 2 0 1 1 - 2 0 1 2
55
9. Property,PlantandEquipmentcontinued
Property, Plant and Equipment Reconciliation continued
TheCorporationdeemedcostasat1July2009tobedepreciatedreplacementcostasnotedabove.Ifplantandequipmentweremeasuredusingthecostmodel,thecarryingamountsat30June2012wouldbeasfollows:
Asset Group ($’000)
Infrastructure Assets Water
Infrastructure Assets
Sewerage
Freehold Land Buildings Other Assets Work In Progress
Total
Cost 643,509 609,941 12,054 2,831 7,774 26,446 1,302,555
Accumulateddepreciation (364,213) (259,991) - (297) (2,180) - (626,681)
Net Carrying Amount as at 30 June 2012 279,296 349,950 12,054 2,534 5,594 26,446 675,874
Cost 636,714 601,351 12,054 2,737 6,642 17,340 1,276,838
Accumulateddepreciation (356,337) (248,000) - (245) (1,413) - (605,995)
Net Carrying Amount as at 30 June 2011 280,377 353,351 12,054 2,492 5,229 17,340 670,843
2012 $’000
2011$’000
10 Intangibles
Computer software
AtCost 2,182 1,531
AccumulatedAmortisation (256) (20)
1,926 1,511
WorkinProgress-AtCost - -
Total 1,926 1,511
Software $000
Work in Progress $000
Total $000
2012 Intangibles - Reconciliation
OpeningNetBookValue 1,511 - 1,511
AdditionsatCost - 651 651
TransfersfromWorkinProgress 651 (651) -
Disposals - - -
AmortisationExpense (236) - (236)
Net Book Value as at 30 June 2012 1,926 - 1,926
2011 Intangibles - Reconciliation
OpeningNetBookValue - 930 930
AdditionsatCost - 601 601
TransfersfromWorkinProgress 1,531 (1,531) -
Disposals - - -
AmortisationExpense (20) - (20)
Net Book Value as at 30 June 2011 1,511 - 1,511
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Notes to the Financial Statements FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012
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2012 $’000
2011$’000
11 CurrentandNon-currentLiabilities
11.1 Borrowings
Allsemi-governmentborrowingshavebeentransactedthroughtheTasmanianPublicFinanceCorporation(Tascorp).Allborrowingsaresecuredbyachargeoverreceivable.
Borrowings:
Current 25,613 10,940
Non-current 70,650 72,729
Total 96,263 83,669
Credit Facilities
At30JunetheCorporationhadaccesstothefollowingfinancefacilities.
Master Loan Borrowing Limit - Tascorp
Facility 100,000 100,000
Lessused/committed 96,263 83,669
Undrawn Balance 3,737 16,331
Temporary Loan Facility - Tascorp
Facility 10,000 -
Lessused/committed - -
Undrawn Balance 10,000 -
Corporate MasterCard
Facility 150 150
Lessused/committed - 3
Undrawn Balance 150 147
11.2 Employee Benefits
Current
AnnualLeave 1,418 1,318
LongServiceLeave 1,800 1,727
SickLeave - 26
RosteredDayOff 45 31
DefinedBenefitSuperannuation-RBF(ReferNote13.2) 91 67
3,354 3,169
Non-current
LongServiceLeave 185 178
DefinedBenefitSuperannuation-RBF(ReferNote13.2) 934 811
1,119 989
Total(1) 4,473 4,158(1)TheEmployeeBenefitsProvisionincludes$650,000(2011:$654,000)ofattributableon-costs.
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Notes to the Financial Statements FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012
Tasmanian Water and Sewerage Corporation (North-Western Region) Pty Ltd
F I N A N C I A L R E P O R T 2 0 1 1 - 2 0 1 2
57
2012 Employees
2011Employees
11 CurrentandNon-currentLiabilitiescontinued
Numberofemployeesatyearend(FTE) 169 166
2012 $’000
2011$’000
11.3 Payables
TradeCreditors 1,660 928
AccruedExpenses 3,949 2,392
AccruedInterestExpense 955 915
Total 6,564 4,235
11.4 Unearned Income
Current
GovernmentGrants(ReferNote3.4) 253 123
Non-current
GovernmentGrants(ReferNote3.4) 3,571 1,917
Total 3,824 2,040
12 Members’EquityTheCorporationisownedbyninecouncilsinthenorth-westernregionofTasmaniaasdetailedinNote21.Eachowner’ssharewasdeterminedeffective1July2009,byitsproportionateshareoftotalnetassetscontributedtotheCorporation.EachofthenineownersholdoneshareintheCorporation,witheachsharehavingequalvotingrights.
Eachsharehasanissuepriceof$1.
12.1 Retained Profits (Accumulated Losses)
OpeningBalance 1,231 (290)
ActuarialGain(Loss)ondefinedbenefitplan (87) 190
TaxeffectofActurialGain(Loss)ondefinedbenefitplan 26 (57)
Shareofothercomprehensiveincomeofassociates (51) (19)
Dividendspaid(ReferNote7) - (467)
ProfitafterIncomeTaxExpense 462 1,874
Closing Balance 1,581 1,231
12.2 Contributed Equity
OpeningBalance 325,108 325,108
Movementforyear - -
Closing Balance 325,108 325,108
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Notes to the Financial Statements FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012
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13 Superannuation
Twodefinedbenefitsuperannuationliabilities,RBFandQuadrant,weretransferredtotheCorporationfromCradleCoastWaterandnineownercouncilson1July2009.DisclosuresregardingthesetwofundsareprovidedinNote13.1and13.2.
13.1 TheCorporationmakessuperannuationcontributionsforanumberofitsemployeestoQuadrantDefinedBenefitsFund,whichisasubfundoftheQuadrantSuperannuationScheme.TheQuadrantDefinedBenefitsFundhasbeenclassifiedasamulti-employersponsoredplan.AstheFund’sassetsandliabilitiesarepooledandarenotallocatedbyemployer,BenzullaActuarialPtyLtd(theActuary)isunabletoallocatebenefitliabilities,assetsandcostsbetweenemployers.Asprovidedunderparagraph32(b)ofAASB119,theCorporationdoesnotusedefinedbenefitaccountingforthesecontributions.
TheActuaryundertookthelastactuarialreviewoftheSchemeat30June2011.Thereviewdisclosedthatatthattimethenetmarketvalueofassetsavailableforfundingmemberbenefitswas$57,588,247,thevalueofvestedbenefitswas$52,794,839,thesurpluswas$4,793,408,andthevalueoftotalaccruedbenefitswas$57,330,437.TheseamountsrelatetoallmembersoftheschemeatthedateofvaluationandnoassetorliabilityisrecordedinQuadrantSuperannuationScheme’sfinancialstatementsfortheCorporation’semployees.
ThefinancialassumptionsusedtocalculatetheAccruedBenefitsfortheFundwere:
NetInvestmentReturn 0%p.a.for2011-12and7.0%p.a.thereafter SalaryInflation 4.0%p.a. PriceInflation n/a
Theactuarialreviewconcludedthat:
TheActuarywillcontinuetoundertakeabriefreviewofthefinancialpositionoftheFundattheendofeachfinancialyeartoconfirmthatthecontributionratesremainappropriate.ThefulltriennialactuarialreviewoftheFundwillhaveaneffectivedateof30June2014andisexpectedtobecompletedlatein2014orearlyin2015.Theemployeralsocontributestootheraccumulationschemesonbehalfofanumberofemployees,howevertheemployerhasnoongoingresponsibilitytomakegoodanydeficienciesthatmayoccurinthoseschemes.
13.2 RBF Defined Benefit Superannuation Liability
TheRBFisadefinedbenefitfundwheremembersreceivelumpsumbenefitsonresignation,andlumpsumorpensionbenefitsonretirement(mostofwhichiscalculatedasamultipleofthemember’sfinalaveragesalary),deathorinvalidity.TheRBFhascontributorymembers,compulsorypreservedmembersandpensionersandthedefinedbenefitssectionofRBFisclosedtonewmembers.Allnewmembersreceiveaccumulationonlybenefits.
Asat30June2012,Mercer(Australia)PtyLtdconductedavaluationofthepastserviceandaccruedliabilitiesfortheCorporation,withintheRetirementsBenefitsFund(RBF)superannuationfund.AnyshortfallbetweenthevaluesofthesebenefitsandthemarketvalueoftheRBFassetsrelevantforthosemembersdeterminesthevalueofanyunfundedsuperannuationandisshownasaliabilityintheStatementofFinancialPosition.TheseamountsareincludedinthesuperannuationliabilityreportedinNote11.2above.ThefundingstatusoftheCorporation’sshareofthisschemeasat30June2012,basedontheactuarialvaluation,issummarisedasfollows:
2012 2011
Principal Actuarial Assumptions as at Balance Date
Discountrate 3.5% 5.5%
Expectedsalaryincreaserate 3.5% 4.5%
Expectedreturnonplanassets(1) 7.5% 7.5%
Expectedpensionincreaserate 2.5% 2.5%
Expectedrateofincreasecompulsorypreservedamounts 3.8% 4.5%
(1)Theexpectedreturnonassetsassumptionisdeterminedbyweightingtheexpectedlong-termreturnforeachassetclassbythetargetallocationof
assetstoeachassetclassandallowingforcorrelationsoftheinvestmentreturnsbetweenassetclasses.Thereturnsusedforeachassetclassarenetof
estimatedinvestmenttaxandinvestmentfees.
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Notes to the Financial Statements FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012
Tasmanian Water and Sewerage Corporation (North-Western Region) Pty Ltd
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13 Superannuationcontinued
ThediscountrateisbasedonthemarketyieldsonthelongestdatedGovernmentBondsasat30June2012extrapolatedtoallowforthefactthatthetermoftheliabilitiesexceedsthetermofthelongestGovernmentBondandadjustedtoallowforinvestmenttax,basedontheexpectedrateoftaxpayablebytheFund.Thedecrementratesused(e.g.,mortalityandretirementrates)arebasedonthoseusedatthelastactuarialvaluationoftheFund.
Operating Costs
OperatingcostsfortheFundasawholewereassumedtobeincurredattherateof1.5%ofsalariesplus1.0%ofpensionspayment.Thiscostisallocatedtoeachentityinproportiontoassets.
Temporary Invalidity Expense
Thecostoftemporaryinvaliditybenefitswasassumedtobe0.2%ofsalariesofcurrentcontributorymembers.
2012 2011
Fund Assets disclosure
Australianequities 29% 25%
Overseasequities 18% 22%
Fixedinterestsecurities 12% 13%
Property,infrastructureandrelatedassets 33% 19%
Other 8% 21%
AssetsarenotheldseparatelyforeachentitybutareheldfortheFundasawhole.ThefairvalueofFundassetswasestablishedbyallocatingthetotalFundassetstoeachentityinproportiontothevalueofeachentity’sfundedliabilities,calculatedusingtheassumptionsoutlinedinthisreport.
ThefairvalueofFundassetsincludesnoamountsrelatingtoanyoftheentity’sownfinancialinstrumentsoranypropertyoccupiedby,orotherassetsusedby,theentity.
2012 $’000
2011$’000
Statement of Financial Position results as at 30 June - Net liability
Definedbenefitobligation 1,190 1,087
RBFContributoryschemeassets (165) (209)
Deficit(surplus) 1,025 878
Unrecognisedpastservicecost - -
Unrecognisednet(gain)loss - -
AdjustmentforLimitationonnetassets - -
Netsuperannuationliability(asset) 1,025 878
Currentnetliability(ReferNote11.2) 91 67
Non-currentnetliability(ReferNote11.2) 934 811
1,025 878
Expense Recognised in the Statement of Comprehensive Income
Employerservicecost 37 56
Expectedreturnonplanassets (15) (20)
Expense recognised in employee related expenses 22 36
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Notes to the Financial Statements FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012
Tasmanian Water and Sewerage Corporation (North-Western Region) Pty Ltd
60
preparingforthefuture
2012 $’000
2011$’000
13 SuperannuationcontinuedInterestcost 57 77
Expense recognised in net financing costs 57 77
Amounts Recognised in Other Comprehensive Income
Recognisedactuarial(gains)/losses 87 (190)
Cumulative Actuarial Gains or Losses recognised in Other Comprehensive Income
Cumulativeamountofactuarial(gains)orlossesatendofprioryear (68) 122
Actuarial(gains)orlossesrecognisedduringtheyear 87 (190)
Cumulativeamountofactuarial(gains)orlossesatendofprioryear 19 (68)
Reconciliation of Fair Value of Scheme Assets
Fairvalueofplanassetsatendofprioryear 209 285
Estimatedemployercontributions 19 251
Estimatedparticipantcontributions 23 25
Estimatedoperatingcosts (2) (3)
Estimatedbenefitpayments (29) (365)
Expectedreturnonassets 15 20
Expected assets at year end 235 213
Actuarialgain(loss)onassets (70) (4)
Individual plan assets at year end 165 209
Actualreturnonplanassets(1) (55) 15(1)Asseparateassetsarenotheldforeachentity,theactualreturnincludesany
differenceintheallocationtoeachentity.
Present Value of the Defined Benefit Obligations
Totaldefinedbenefitobligationsatendofprioryear 1,087 1,491
Employerservicecostplusoperatingcosts 37 56
Interestcost 57 77
Estimatedparticipantcontributions 23 25
Estimatedoperatingcosts(administration,insurance) (2) (3)
Estimatedbenefitpaymentpluscontributionstax (29) (365)
Expected defined benefit obligations at year end 1,173 1,281
Actuarial(gain)lossonliabilities 17 (194)
Actual total defined benefit obligations at year end 1,190 1,087
Thedefinedbenefitobligationconsistsentirelyofamountsfromplansthatarewhollyorpartlyfunded.
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Notes to the Financial Statements FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012
Tasmanian Water and Sewerage Corporation (North-Western Region) Pty Ltd
F I N A N C I A L R E P O R T 2 0 1 1 - 2 0 1 2
61
2012 $000
2011$’000
2010$’000
13 SuperannuationcontinuedHistorical information
Totaldefinedbenefitobligation 1,190 1,087 1,491
Actualassetsatyearend 165 209 285
Deficit (surplus) 1,025 878 1,206
Experienceadjustmentonliabilities (85) (183) (18)
Experienceadjustmentonassets 70 4 82
TheexperienceadjustmentforFundliabilitiesrepresentstheactuarialloss(gain)duetoachangeintheliabilitiesarisingfromtheFund’sexperience(e.g.membershipmovements,salaryincreasesandindexationrates)andexcludestheeffectofthechangesinassumptions(e.g.movementsinthebondrate).
Expected Contributions - Financial Year Ending 30 June 2013
Theestimatedemployercontributionsforthefollowingfinancialyearare$91,000.
2012 $’000
2011$’000
14 CommitmentsforExpenditure
14.1 Capital Commitments
Capitalcommitmentstotallingat30Juneof$4,462,728(2011:$4,480,191)werenotprovidedintheaccounts.
Paymentswithin1year 4,462 4,480
Payments1-5years - -
Paymentslongerthan5years - -
Total 4,462 4,480
14.2 Lease Commitments
Leasepaymentsexpensedduringtheyear 264 334
Operating Lease Commitments
Paymentswithin1year 141 126
Payments1-5years 76 152
Paymentslongerthan5years - -
Total 217 278
TheseleasecommitmentsrepresentpaymentsdueoncurrentoperatingleasesfortheCorporationsofficeaccommodationandinformationtechnology.Theleasesarecancellablebutincurapenaltyofthepresentvalueoffutureleasepayments.Thereisnodocumentedoptiontopurchaseleasedassetsattheexpiryoftheleases.
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Notes to the Financial Statements FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012
Tasmanian Water and Sewerage Corporation (North-Western Region) Pty Ltd
62
preparingforthefuture
2012 $’000
2011$’000
15 ContingentLiabilitiesTheCorporationwasnotawareofanycontingentliabilitiesatthetimeoffinalisingthefinancialreport.
16 RemunerationofAuditorsAudit Services - Tasmanian Audit Office
Annualexternalauditfee 40 37
17 CompensationofKeyManagementPersonnelDirectors
Short-Term 147 145
PostEmployment(superannuation) 13 13
Other Key Management Personnel
Short-Term 823 922
PostEmployment(superannuation) 81 93
Total 1,064 1,173
FurtherdetailsonthecompensationofkeymanagementpersonnelcanbefoundintheRemunerationReportwhichformspartoftheDirectors’Report.
18 RelatedPartyDisclosures18.1 Board Directors
TheBoardDirectorsduringthefinancialyearended30June2012anduptothedateofthisreportwere:
-MrMilesHampton-Chairman
-MrGrantAtkins
-MrBrianBayley
-MsSarahMerridew
-DrDanNorton
-MrTonyMacCormick(Resigned23November2011)
2012 $
2011$
Other expenses associated with the Board are as follows:
Travel,accommodation,mealsandother 16,284 24,867
Directorprofessionaldevelopment - 1,276
16,284 26,143
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Notes to the Financial Statements FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012
Tasmanian Water and Sewerage Corporation (North-Western Region) Pty Ltd
F I N A N C I A L R E P O R T 2 0 1 1 - 2 0 1 2
63
18 RelatedPartyDisclosurescontinued
18.2 Transactions with Directors’ Related Parties
TherewerenoloansinexistencebytheCorporationtoresponsibleorrelatedpartiesduringthefinancialyear.
Anumberofkeymanagementpersons,ortheirrelatedparties,holdpositionsinotherentitiesthatresultinthemhavingcontrolorsignificantinfluenceoverthefinancialoroperatingpoliciesofthoseentities.AnumberoftheseentitiestransactedwiththeCorporationinthereportingperiod.
Inaddition,anumberofkeymanagementpersons,ortheirrelatedparties,transactedwiththeCorporationinthereportingperiodasresidentsorownersofpropertiesintheregioninwhichtheCorporationprovideswaterandsewerageservices.Thetermsandconditionsofthetransactionswithkeymanagementpersonnelandtheirrelatedpartieswerenomorefavourablethanthoseavailable,orwhichmightreasonablybeexpectedtobeavailable,onsimilartransactionstonon-keymanagementpersonel.
Wheremattersforresolutionwerediscussedinrespecttotheabovetransactions,Directorswerenotpresentinmeetings.
18.3 Transactions with Other Related Parties
TheCorporationownsaonethirdshareinTasmanianWaterandSewerageCorporation(CommonServices)PtyLimited,tradingasOnstream.OnstreamprovidesvariousservicestotheCorporation.RefertoNote22fordetailsoftheservicesprovidedandfinancialinformationoftheinvestmentinthisassociate.Transactionswerenotconductedonan“arm’slength”basisastheownerCorporationswereinvolvedinthesettingofpricesandpriceswereonlychargedonacostrecoverybasis.Allservicesarechargedmonthlywithsettlementwithin31days.Totalpurchases(exclusiveofGST)andamountspayablewere:
2012 $’000
2011$’000
Transactions with Onstream
ServiceFees 3,345 3,469
Reimbursementofothercosts 1,053 691
AccountsPayable 803 207
Sales 42 233
AccountsReceivable - 8
TheCorporationisownedbyninecouncilsinthenorthwestofTasmaniaasdetailedinNote21.ThecouncilsmakepaymentstotheCorporationforwaterandsewerageservicesandothermiscellaneousservices.
Transactionsareonanarm’slengthbasisinthenormalcourseofbusinessandonnormalcommercialtermsandconditions.
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Notes to the Financial Statements FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012
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18 RelatedPartyDisclosurescontinued
18.3 Transactions with Other Related Parties continued
Sales for the year ended 30 June 2012
Water and Sewerage Sales
$’000
Other Services $’000
Amount Receivable as at
30 Jun 2012 $’000
BurnieCityCouncil 230 83 87
CentralCoastCouncil 72 57 84
CircularHeadCouncil 109 39 1
DevonportCityCouncil 158 30 80
KentishCouncil 38 4 1
KingIslandCouncil 30 - 8
LatrobeCouncil 101 22 37
Waratah-WynyardCouncil 125 6 14
WestCoastCouncil 81 14 19
Salesfortheyearended30June2011
WaterandSewerageSales
$’000
OtherServices$’000
AmountReceivableasat
30Jun2011$’000
BurnieCityCouncil 222 92 68
CentralCoastCouncil 79 86 56
CircularHeadCouncil 42 11 42
DevonportCityCouncil 134 59 69
KentishCouncil 37 - 36
KingIslandCouncil 17 - 4
LatrobeCouncil 66 33 7
Waratah-WynyardCouncil 113 - 1
WestCoastCouncil 70 1 -
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Notes to the Financial Statements FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012
Tasmanian Water and Sewerage Corporation (North-Western Region) Pty Ltd
F I N A N C I A L R E P O R T 2 0 1 1 - 2 0 1 2
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18 RelatedPartyDisclosurescontinued
18.3 Transactions with Other Related Parties continued
TheCorporationmakespaymentstothecouncilsforrates,communityserviceobligationcontributionsandothermiscellaneousservices.Transactionsareonanarm’slengthbasisinthenormalcourseofbusinessandoncommercialtermsandconditions.
Purchases for the year ended 30 June 2012Council Rates Other Council
ServicesAmount Payable as at 30 Jun 2012
BurnieCityCouncil 103 95 8
CentralCoastCouncil 47 131 -
CircularHeadCouncil 18 29 -
DevonportCityCouncil 119 83 1
KentishCouncil 6 - -
KingIslandCouncil 2 375 23
LatrobeCouncil 7 3 -
Waratah-WynyardCouncil 18 60 8
WestCoastCouncil 19 - -
Purchasesfortheyearended30June2011CouncilRates OtherCouncil
ServicesAmountPayableasat30Jun2011
BurnieCityCouncil 100 300 6
CentralCoastCouncil 25 37 1
CircularHeadCouncil 17 13 -
DevonportCityCouncil 116 30 1
KentishCouncil 5 2 -
KingIslandCouncil 2 270 -
LatrobeCouncil 7 36 -
Waratah-WynyardCouncil 12 55 -
WestCoastCouncil 4 26 -
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Notes to the Financial Statements FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012
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2012 $’000
2011$’000
19 NotestotheStatementofCashFlow
19.1 Reconciliation of Net Cash From Operating Activities to Operating Result
NetProfit(Loss)beforeIncomeTaxEquivalents 654 2,777
Add (Less) Non-Cash Items:
DepreciationandAmortisationExpense 12,698 12,424
AllowanceforImpairedReceivables 290 346
Loss(Profit)onSaleofNon-currentAssets (22) (84)
GiftedAssetsandContributions (1,125) (858)
ActuarialLossonDefinedBenefitPlans (87) -
ShareofNetProfitofAssociate (14) (43)
Changes in Assets and Liabilities:
(Increase)DecreaseinReceivables (2,436) (1,592)
(Increase)DecreaseinStores (105) (245)
(Increase)DecreaseinPrepayments (34) (63)
Increase(Decrease)inPayables 2,326 (1,331)
Increase(Decrease)inEmployeeBenefits 316 272
Income Tax Equivalents Paid (1,647) (1,278)
Cash Flows from Operating Activities 10,814 10,325
19.2 Reconciliation of Cash and Cash Equivalents
CashManagementAccountwithTascorp - 6
CashatBankandonHand 2,327 2,670
Cash as per Statement of Cash Flows 2,327 2,676
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Notes to the Financial Statements FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012
Tasmanian Water and Sewerage Corporation (North-Western Region) Pty Ltd
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20 FinancialInstruments
20.1 Significant Accounting Policies
TheCorporation’sactivitiesexposeittoavarietyoffinancialrisks:marketrisk,creditriskandliquidityrisk.TheCorporationusesdifferentmethodstomeasureandmanagethedifferentfinancialrisks.TheBoardhastheprimaryresponsibilitytosetappropriatepoliciestomanagetheserisks.ThisnotepresentsinformationabouttheCorporation’sexposuretoeachoftheserisks,andtheobjectivespoliciesandprocessesformeasuringandmanagingrisk.
DetailsofsignificantaccountingpoliciesandmethodsadoptedintherecognitionandmeasurementwithrespecttoeachclassoffinancialassetsandliabilitiesareincludedunderNotes3.7,3.9,3.16,3.18,3.20and3.21.
Categoriesoffinancialassetsandfinancialliabilitiesatbalancedatewere:
Financial Instruments
2012 Carrying Amount
$’000
2011CarryingAmount
$’000
Financial Assets
Cashandcashequivalents 2,327 2,676
LoansandReceivables 14,966 12,818
Total Financial Assets 17,293 15,494
Financial Liabilities
Payablesatamortisedcost 6,564 4,235
BorrowingsatamortisedCost 96,263 83,669
Total Financial Liabilities 102,827 87,904
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Notes to the Financial Statements FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012
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20 FinancialInstrumentscontinued
20.1 Significant Accounting Policies continued
Netholdinggain/lossonfinancialinstrumentsbycategory:
Financial Instrument 2012
Interest (Income) and Expense
$’000
Fee (Income) and Expense
$’000
Impairment Loss $’000
Total $’000
Financial Assets
Cashandcashequivalents (81) - - (81)
LoansandReceivables - - 290 290
Total Financial Assets (81) - 290 209
Financial Liabilities
Payablesatamortisedcost - - - -
BorrowingsatamortisedCost 5,833 875 - 6,708
Total Financial Liabilities 5,833 875 - 6,708
Net Holding Loss 5,752 875 290 6,917
Financial Instrument 2011
Interest (Income) and Expense
$’000
Fee (Income) and Expense
$’000
Impairment Loss $’000
Total $’000
Financial Assets
Cashandcashequivalents (69) - - (69)
LoansandReceivables - - 346 346
Total Financial Assets (69) - 346 277
Financial Liabilities
Payablesatamortisedcost - - - -
BorrowingsatamortisedCost 5,188 783 - 5,971
Total Financial Liabilities 5,188 783 - 5,971
Net Holding Loss 5,119 783 346 6,248
20.2 Interest Rate Risk
TheobjectivesoftheCorporation’sinterestrateriskmanagementpolicyaretocontainthepotentialadversefinancialimpactfromunfavourablemovementsininterestrates,predominantlyassociatedwithinterestbearingliabilities,andtocapturethepotentialforreducingcostsbymanagementoftheCorporation’sdebt.TheCorporation’sinterestrateriskismanagedbysettingborrowingswithtermsandmaturitystructureswhichreflectthemediumandlongertermcapitalrequirementsandtariffstructuresoftheCorporation.Theaimofinterestrateriskmanagementistominimisethelongertermcostofborrowingsbyadoptingdebtportfoliomaturitiesandtospreaddebtbetweenfixedandfloatinginstruments.DebtissourcedfromTascorpandismanagedwithinarangeofBoardapprovedlimitswithdebtlevelsandinterestbeingmonitoredregularly.TheCorporationhasnotengagedhedgingaspartofitsfinancialriskmanagementstrategy.
TheCorporationhasminimalexposuretocashflowinterestrateriskthroughitscashanddeposits,termdepositsandbankoverdraftsthatareatfloatingrates.
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Notes to the Financial Statements FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012
Tasmanian Water and Sewerage Corporation (North-Western Region) Pty Ltd
F I N A N C I A L R E P O R T 2 0 1 1 - 2 0 1 2
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20 FinancialInstrumentscontinued
20.2 Interest Rate Risk continued
As at 30 June 2012
Variable interest
rate $’000
Fixed interest rate maturing in: Non-interest bearing $’000
Total carrying amount $’000
Weighted average interest
rate 1 year $’000
1 – 5 years $’000
> 5 years $’000
Financial Assets
CashatBank 2,327 - - - - 2,327 4.16%
CashManagementAccount - - - - - - 4.54%
Receivables - - - - 14,966 14,966 -
Total 2,327 - - - 14,966 17,293 -
Financial Liabilities
Borrowings-Tascorp 25,137 5,000 42,500 23,626 - 96,263 6.30%
Payables - - - - 6,564 6,564 -
Total 25,137 5,000 42,500 23,626 6,564 102,827 -
Net Financial (Liabilities) Assets (22,810) (5,000) (42,500) (23,626) 8,402 (85,534) -
As at 30 June 2011
Variable interest
rate $’000
Fixed interest rate maturing in: Non-interest bearing $’000
Total carrying amount $’000
Weighted average interest
rate 1 year $’000
1 – 5 years $’000
> 5 years $’000
Financial Assets
CashatBank 2,670 - - - - 2,670 4.58%
CashManagementAccount 6 - - - - 6 4.66%
Receivables - - - - 12,818 12,818 -
Total 2,676 - - - 12,818 15,494 -
Financial Liabilities
Borrowings-Tascorp 10,494 11,602 27,500 34,073 - 83,669 6.46%
Payables - - - - 4,235 4,235 -
Total 10,494 11,602 27,500 34,073 4,235 87,904 -
Net Financial (Liabilities) Assets (7,818) (11,602) (27,500) (34,073) 8,583 (72,410) -
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Notes to the Financial Statements FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012
Tasmanian Water and Sewerage Corporation (North-Western Region) Pty Ltd
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20 FinancialInstrumentscontinued
20.2 Interest Rate Risk continued
WhilethetableabovehighlightstheCorporation’stotalexposuretovariableinterestratesat30June2012wasanetliabilityof$22,810,000(2011:$7,818,000).TheCorporationisexposedtomovementsininterestratesonvariableinterestbearingliabilities.Thereissufficientvolatilityininterestratesanditisreasonablypossibleratesmaymarginallyincreaseoverthenext12monthsbutmorelikelydecrease.
Thetablebelowshowstheimpactonprofitaftertaxandequityona0.25%increaseanda0.25%decreaseininterestrates.
TheCorporationonlyentersintoborrowingswithTascorp.TheinterestratesensitivityislargleybasedupontheforecastsprovidedbyTascorp.
Profit after tax 0.25% increase
30 Jun 12 $’000
Profit after tax 0.25% decrease
30 Jun 12 $’000
Profitaftertax1%increase30Jun11
$’000
Profitaftertax1%decrease
30Jun11$’000
CashandCashEquivalents 4 (4) 19 (19)
InterestBearingLiabilities-Variable (44) 44 (73) 73
Total (40) 40 (54) 54
20.3 Credit Risk
ExposuretocreditriskarisesfromthepotentialdefaultofacounterpartywithrespecttotheCorporation’sfinancialassets.Financialassetsincludecashandcashequivalents,tradeandotherreceivables.AsidentifiedinNote20.2,theCorporation’smaximumexposuretocreditriskatreportingdatewas$17,513,000(2011:$15,494,000).
Creditriskismeasuredatfairvalue.Allreceivablebalancesaremonitoredonanongoingbasis.Tradereceivablesconsistofalargenumberofcustomersandindustriesovertheregion.TheCorporationdoesnotholdanycollateraloveranytradereceivable.TheCorporationcurrentlyrecordsalargeportionofpastduereceivablesthatarebeingprocessedbytherecentlydevelopedcreditcontrolprocess.
ForcashatbankitistheCorporation’spolicytoonlydealwithAustralianbankswithaminimumStandardandPoor’slongtermcreditratingofA.Theratingcounterpartiesaremonitoredonanongoingbasis.
2012 $’000
2011$’000
Age of receivables that are past due but not impaired
0-30Days 2,354 3,086
31-60Days 287 424
61-90Days 521 147
91Daysandover 2,988 4,140
Total 6,150 7,797
Age of impaired receivables
0-30Days 9 -
31-60Days 5 -
61-90Days 1 -
91Daysandover 719 444
Total 734 444
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Notes to the Financial Statements FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012
Tasmanian Water and Sewerage Corporation (North-Western Region) Pty Ltd
F I N A N C I A L R E P O R T 2 0 1 1 - 2 0 1 2
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20 FinancialInstrumentscontinued
20.4 Liquidity Risk
LiquidityriskistheriskthattheCorporationwillnotbeabletomeetitsfinancialobligationsastheyfalldue.TheCorporationmanagesliquidityriskbymaintainingadequatereservesandbankingfacilitiesandbycontinuouslymonitoringforecastsandactualcashflowsandmatchingthematurityprofilesoffinancialassetsandfinancialliabilities.
Thefollowingtableidentifiesthecontractualmaturitiesonrolloveroffinancialliabilitiesatthereportingdate.
3 months or less $’000
3 - 12 months $’000
1 - 2 years $’000
2 - 5 years $’000
> 5 years $’000
Carrying Amount $’000
2012
Borrowings-Tascorp 25,137 5,000 12,500 30,000 23,626 96,263
Payables 6,564 - - - - 6,564
Total 31,701 5,000 12,500 30,000 23,626 102,827
2011
Borrowings-Tascorp 12,096 10,000 5,000 22,500 34,073 83,669
Payables 4,235 - - - - 4,235
Total 16,331 10,000 5,000 22,500 34,073 87,904
20.5 Foreign Exchange Risk
TheCorporationisexposedtoaninsignificantforeigncurrencyriskrelatingtopurchasesofsuppliesandconsumablesfromoverseas.Whilethereisalimitedamountofpurchasesdenominatedinforeigncurrenciestheriskisfurtherreducedbyashorttimeframebetweencommitmentandsettlement.ShouldasignificantforeigncurrencyexposurearisetheCorporationisauthorisedtoenterintoaderivativeinstrumenttolimittheeffectofforeigncurrencymovements.TheCorporationdidnotenterintoanyderivativeinstrumentsduringtheyear.
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Notes to the Financial Statements FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012
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20 FinancialInstrumentscontinued
20.6 Net Fair Value
AtbalancedatetheCorporationdidnotholdanyfinancialinstrumentswhichhavebeenmeasuredatfairvalueandrecognisedontheStatementofFinancialPosition.At30JunetheCorporationwasnotcarryinganyfinancialassetsorliabilitieswhichweretradeableonanactivemarketwithreferencetoquotedprices.TheCorporationhadnotenteredintoanyderivativesorforwardforeigncurrencycontractsatbalancedate.Accordinglytherewerenofinancialinstrumentstoreportinlevel1,2or3ofthefairvaluehierarchyfor30June2012(2011:Nil).Thefairvalueofthefinancialassetsandliabilitiesatyearendwere:
Financial Instrument
Total carrying amount per the statement of
financial position
Aggregate net fair value
2012 $’000
2011$’000
2012 $’000
2011$’000
Financial Assets
CashatBank 2,327 2,670 2,327 2,670
CashManagementAccount - 6 - 6
Receivables 14,966 12,818 14,966 12,818
Total 17,293 15,494 17,293 15,494
Financial Liabilities
Borrowings 96,263 83,669 102,467 86,323
Payables 6,564 4,235 6,564 4,235
Total 102,827 87,904 109,031 90,558
Themethodsandassumptionsusedtodeterminethesenetfairvaluesofthefinancialassetsandliabilitiesareasfollows:
-Cash,cashmanagementandtermdeposits-thecarryingamountapproximatesthefairvalueduetotheshorttermnatureoftheinstrument;
-Receivables,tradecreditorsandaccruals-thecarryingamountapproximatesthefairvalue;
-Borrowings-arecarriedatamortisedcostwhichisdifferenttonetfairvalueduetomarketsensitivityofthedebtportfolioasat30June2012.Borrowingshelduntilmaturityarepaidatthecarryingamount.
20.7 Capital Management Policy
TheCorporationhasestablishedathreeyearcapitalexpenditureprogramnecessarytoachievethebusinessandregulatoryobjectives.CapitalismanagedbytheCorporationtoachievetheseobjectiveswithinfinanciallyprudentgearingthresholdswhilebeingmindfulofacceptablereturnstoshareholders.
21 ControllingEntities
TheCorporationoperatesasanentityundertheCorporationAct2001(Cth)andinaccordancewiththeWaterandSewerageCorporationsAct2008(WSCA)andtheWaterandSewerageIndustryAct2008(WSIA).CradleMountainWaterisownedbythefollowingninecouncilsinNorth-WesternTasmania:BurnieCityCouncil,CentralCoastCouncil,CircularHeadCouncil,DevonportCityCouncil,KentishCouncil,KingIslandCouncil,LatrobeCouncil,Waratah-WynyardCouncilandWestCoastCouncil.
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Notes to the Financial Statements FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012
Tasmanian Water and Sewerage Corporation (North-Western Region) Pty Ltd
F I N A N C I A L R E P O R T 2 0 1 1 - 2 0 1 2
73
22 InvestmentinAssociate
On9December2008theCorporationwasissuedoneofthreesharesinTasmanianWaterandSewerageCorporation(CommonServices)PtyLimited,tradingasOnstream.TheothertwosharesareownedbyTasmanianWaterandSewerageCorporation(SouthernRegion)PtyLimited,tradingasSouthernWaterandTasmanianWaterandSewerageCorporation(NorthernRegion)PtyLimited,tradingasBenLomondWater.
Allordinarysharesshallrankparipassuinallrespects,exceptforthedividendrightsattachingtotheshares,whicharedeterminedbytheproportionofsalesbyOnstreamtoeachowner.TheCorporation’sshareofOnstream’sprofitfortheyearisalsodeterminedonthisbasis.
Onstreamprovidesvariousservicestoallthreeownersincludinginformationtechnology,billing,payroll,procurementandfinancialservices.Fordetailsonthecostoftheseservices,referNote18.3.
ThefollowingtableshowssummarisedfinancialinformationforOnstream,togetherwithareconciliationofmovementsinthecarryingamountoftheCorporation’sinvestment.
Onstream’sfiguresareforthesameyearenddateastheCorporation’saccounts.
2012 $’000
2011$’000
Summarised financial information of Onstream
Revenue 13,693 16,154
Profitbeforeincometax 74 232
Incometaxequivalentsexpensebenefits (22) (70)
Profitafterincometax 52 162
Othercomprehensiveincome(loss)aftertax (189) (73)
Total comprehensive income for the period (137) 89
Corporation’sshareofprofitbeforetax 20 62
Corporation’sshareofincometaxequivalents(expense)benefit (6) (19)
Corporation’sshareofprofitaftertax 14 43
Corporation’sshareofothercomprehensiveincome(lossaftertax) (51) (19)
Corporation’s share of total comprehensive income (loss after tax) (37) 24
Assets 10,306 10,260
Liabilities (10,296) (10,113)
Net Assets 10 147
Reconciliation of carrying amount of investment
Carryingamountatbeginningofyear 38 14
Shareofsurplus(deficit)fortheyear (37) 24
Carrying amount at end of year 1 38
23 SubsequentEvents
Therehavebeennomattersorcircumstancesthathavearisensincetheendofthefinancialyearthathavesignificantlyaffected,ormayaffecttheCorporation,itsoperations,resultsofoperations,orstateofaffairsinfuturefinancialyears.
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CradleMountainWaterABN90133655008
162PumpingStationRoad,Forth•POBox3147DC,UlverstoneTAS7315Phone:(03)64987900Fax(03)64987935Email:[email protected]
www.cmwater.com.au
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